Mobile Commerce Insider Featured Article

May 20, 2014

LevelUp to Offer Mobile Payments Using QR Codes

Today, mobile shopping is offering consumers a new option: payment through QR codes. Mobile application developers are working on changing buyers’ payment habits by providing simple, one-click payment electronic transactions to purchase goods and services.

Sandy Shen, research director at Gartner, says mobile payments are set for a new wave of growth, as many merchants are launching mobile apps and deploying contactless readers (which sync all payment transactions coming from a NFC reader linked to their point-of-sale terminal) to be part of the mobile payments movement.

Convenience-oriented QR code apps for consumers give the option to process a payment directly from a smartphone, making the entire process much easier and more streamlined. QR code payments are now being deployed on a larger scale thanks to advances in technology. QR code payments are as practical as a mobile Web payment platform and even more, as they only require a user to utilize the QR code and radio frequency identification (RFID) on a smartphone to make a payment.

A company that offers contactless mobile payments is LevelUp, a Massachusetts-based startup that offers an open mobile payment network in the U.S. for merchants to handle credit card payments; it recently collaborated with Revention, Inc., a developer of complete, customizable management solutions, to have its mobile loyalty and payments platform include a point-of-sale solution. As a PR Newswire post reported last week, the partnership enables mobile phone users to pay through the use of a code scan on their smartphone via Level Up that integrate with Revention’s intuitive POS system.

As an alternative to credit card payments, applications like Level Up are gaining in popularity; today, they can be routinely used to make payments for purchases at 14,000+ partnering stores that have a white box, a QR-code scanner made by LevelUp, near the checkout counter. At the cashier, customers simply open the LevelUp app and place the QR code to the scanner (the white box); the transaction is then complete and the user will get an instant digital receipt seconds later.

Overall, using the app to pay for a purchase is considered a much faster process than using a credit card. Paying with LevelUp, according to the post, is said to “fill a demand that will only continue to increase in the future…over one and a half million consumers are already paying with LevelUp,” said Harald Prokop, CTO of LevelUp. He adds the company is “excited about the partnership with Revention to provide merchants a seamless integrated solution to save on processing…”

Business Insider Australia explains in detail how the system works. On the consumer end, users will need to download the LevelUp app (which is available for iPhone, Android and Windows Phone), then, enter their credit card information once. LevelUp, then, safeguards account data; the company says client information is transmitted by SSL directly to a secure electronic database. When it comes time to make a purchase, one simply scans the code at any merchant that accepts LevelUp.

In essence, LevelUp enables mobile payments from any customer by turning their credit card information into a scannable QR-code. Those that opt to pay with LevelUp make progress toward unlocking loyalty credit. However, anytime a customer uses one of these LevelUp promotions to pay the merchant, LevelUp takes a 25 percent fee. What’s more, LevelUP charges merchants, per transaction, 1.95 percent credit card processing fee. Compared to mobile-payments startup Square Inc. that charges 2.75 percent, LevelUp is a much cheaper solution, points out Seth Priebatsch, founder of Levelup. In addition, he expects LevelUp to charge nothing (0 percent credit card processing fee) in the next few years, by being able to offset the transaction fee as soon as the advertising side of its business allows it. 




Edited by Maurice Nagle




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