LevelUp, a centralized payment system based in Boston, has
recently adopted a radical new strategy in accepting digital payments. Before I
delve into this strategy, let me explain what LevelUp is, and how it works.
LevelUp is a payment program which requires a user entering credit card
information manually or by taking a snapshot of the card. Then, the program
generates a unique Quick Response(QR) code for each card. This code is scanned
at checkout, allowing for a quick and easy payment experience.
The
unique strategy that LevelUp corporate has adopted totally eliminates per-swipe
charges for business owners. Instead, LevelUp generates revenue based on
promotion programs. In an effort to increase sales, merchants can offer
promotions to new and loyal customers. Typical promotions give customers
discounts for initial purchases and additional discounts for loyal patronage.
LevelUp collects a 40% promotion charge each time a purchase is made. For
example, if there is a $5 discount for initial customers, LevelUp receives $2
of the discount.
Could
this make paying a smoother process? More importantly, will a substantial
number of customers and businesses use it?
That seems like a great idea but it also seems like they will charge alot. If they do a 10% on a thousand dollars, then wouldnt that mean that the business would have to pay 40 dollars for the service on top of the discount? Appears to be expensive.
ReplyDeleteI am in an organization that uses the Square Card reader in order to receive credit card payments for membership dues, fundraising, etc. Squares contract is that they take 2.75% of each swipe as their revenue. Although this may come up to a lot, it seems like the most effective way to approach this. What if the company or business that decides to use LevelUp never offers any promotional products? Is the service going to be completely free?
ReplyDeleteThis sounds like a cool way to go about mobile payments. I think its great for the seller as they don't get charged per swipe. It also sounds like this way attracts customers as there are discounts on products which may mean its cheaper for them??? Its definitely a new strategy in this market and i will be interested to see whether it works out well or not.
ReplyDeleteJack
It will be expensive if they choose to participate in any discount programs, they are still charged for a loyalty type program that involves giving customers credit for spending a certain amount. Whenever the credit is redeemed (similar to frequent flyer miles) the store is charged thirty-five cents per dollar of credit redeemed along with the principle amount of the credit. Even though there are loyalty rewards fees for merchants, the cost is still lower that of conventional credit card use. This is due to the token based security approach LevelUp uses.
ReplyDeleteI think this is a great idea. Is this for your phone? If so, the main question I would ask is what if someone gets your phone? Is this a secured program? I like the idea of getting rewards for using it just like using a credit card that has rewards built in. Another question I would ask is will you get double the points for using the program and your card?
ReplyDeleteYes, LevelUp is for mobile devices such as smart phones and tablets. If a mobile device is lost or stolen, it could be treated as if credit cards had been stolen. First, LevelUp would need to be notified and instructed not to accept payments from the missing device. Then, card companies should also be instructed to reject payments from the missing card accounts. I believe rewards points earned would count to their respective companies.
ReplyDelete