Why Loyalty Programs Are The Next Step for Mobile Payment

Read the original story on: WSJ Blog

Few major mobile wallet providers, save maybe for LevelUp, have done a great job integrating into store loyalty programs. For now, Apple Pay doesn’t work with corporate credit cards or certain co-branded cards tied to loyalty programs. It is crucial for the mobile payment industry to figure out how to combine those elements in order to create a seamless and rewarding shopping experience on mobile that customers actually love to use.

Partner Spotlight: LevelUp

It’s always a good sign when a startup’s technology keeps popping up in your favorite places.  We’ve been tracking mobile payments company LevelUp since 2011, but recently it’s become part of our everyday lives as the platform has been adopted by our go-to coffee and salad spots Gregory’s and Fresh & Co.

LevelUp’s mobile application leverages QR technology to enable local businesses to process mobile transactions via smartphones.  Stores place a small box shaped LevelUp scanner at the counter, and customers scan a QR code within their app to process their payment.  LevelUp also allows businesses to activate loyalty programs with the platform to reward consumers for repeat visits, first time visits, or spending significant time in a location.

For now the technology is deployed in a number of major cities including Boston, Chicago, Philadelphia, St. Louis, New York City, Atlanta, San Francisco and Seattle. Based on feedback from clients in those cities, LevelUp is seeing increasing demand for white label integration into brands’ existing apps.  Data indicates the white label solutions also are most effective for engagement— businesses using LevelUp’s app see 11-14% of users using the platform for payments, while those integrating it into their own apps typically see 24% adoption.

Results like that are competitive to forward-thinking brands like Starbucks, and make LevelUp a great potential solution for any brick and mortar location looking for a plug-and-play payment and loyalty solution.  LevelUp is also finding great success with a “Re-Engagement” targeting feature, which allows businesses to lure customers with offers if they haven’t made a payment at a location for a certain amount of time.

The company offers a pay-for-performance model for campaigns reaching out to consumers– typically businesses pay a 25% fee based on the redemption of offers (if a consumer redeems a $10 offer, LevelUp would get paid $2.50). For now Food Services drives most of its businesses, but expect to see Retail follow suit as the company continues to build traction.