LevelUp Launches White Label Product to Give Merchants Branded Payments Apps

Today Boston-based mobile payments provider LevelUp debuted a white label version of its loyalty and payments solution, allowing merchants to get custom-built branded apps powered by LevelUp’s platform. Until today, businesses using LevelUp’s no-fee mobile payments system could process payments via the company’s branded consumer-facing apps, or add LevelUp functionality into their existing apps using the API. The company has almost 300,000 active users, with almost 4,000 merchants in the network.

LevelUp founder Seth Priebatsch said in an interview that he’s often considered whether mobile payments hit mainstream adoption through merchant-specific apps and mobile wallets, or through apps like his own that offer a third-party payments service. Today’s white label product is a way to bridge that gap between third-party and in-house solutions. “What we decided on was that businesses would probably want all the scale, the infrastructure, the community, the interchange zero, the analytics, everything that LevelUp has built, but probably do also want to control the brand experience, at least for the bigger guys, and therefore are going to need their own app,” he said.

Merchants who want their own custom apps can either work with LevelUp’s development team using the Built By LevelUp service to create a custom app, or developers can use the soon-to-launch software development kit (SDK) to build a custom app for merchants or add LevelUp’s functionality into an existing app. Merchants get access to LevelUp’s existing dashboard and features, including the loyalty program.

The experience for consumers will remain the same: they download the merchant’s branded app, link a credit or debit card, and then get a QR code they can scan at that merchant’s stores. If users have a LevelUp account they can sign in, or sign up for a new one, and users can pay with the regular LevelUp mobile apps if they don’t want to download the branded merchant app.

Priebatsch said for consumers, the value proposition for downloading devoted merchant apps will be the custom features they’re building in. The company’s first white label customer is Washington, DC-based fresh food chain sweetgreen, which has built in custom loyalty features beyond LevelUp’s existing rewards programs.

While LevelUp doesn’t charge businesses fees to use its branded solution or hardware, the white label product will be custom priced for the Built by LevelUp service, between $40,000-$50,000 per platform. Companies will also still pay for the loyalty and rewards program, which charges merchants $0.40 of each dollar they make via a LevelUp campaign. And when the SDK launches within the next couple months it will give developers the ability to build custom apps for a one-time fee of $5,000.

The target market for the white label product is merchants with 15-400 locations, unlike the regular LevelUp app which could suit small retailers as well. “If you have one or two locations, you’re probably not going to want a custom app, you’re probably going to use the LevelUp app and get all the advantages out of that. If you have 15,000 locations…you probably bought a whole team of developers and are building your own crazy solution,” he said, adding that they’re targeting “that sweet spot in the middle, where you have the budget, the sophistication and the brand scale…you have the scale to want your own custom app, but not necessarily the scale to want to pour a couple million dollars into it.”

The White Label launch comes on the heels of LevelUp’s announcement in early September that they would be adding NFC support into their merchant terminals. Though the subsequent iPhone 5 announcement was noticeably lacking NFC support, Priebatsch said the next one probably will include it. The updated merchant hardware and NFC-supported consumer app is still being released within the next couple months, and Priebatsch said that ultimately their goal is to be technology agnostic.

“Is it a make-or-break feature? No. Even if the iPhone 5 had it it wouldn’t have been a make-or-break feature because until every device on the planet has it, you still need to support something that works with just a screen.”

After today’s launch of the white label product, Priebatsch said they’ll likely be able to handle three new clients per month, and beyond that the SDK will allow third-party developers to build custom apps for clients. Ultimately he said that their business model is loyalty campaigns, so the goal is to eventually hand off custom development to focus on merchant campaigns. If they can get developers to use the SDK it will open up their merchant base, which will help their brand presence and ultimately their bottom line.

 

Erin Bury

Erin Bury

Erin has covered startups and technology for over three years in publications including Sprouter Weekly, The Globe and Mail, Business Insider, Mashable, and VentureBeat. She also writes a regular startup column for the Financial Post, and is a technology expert on CTV News Channel. Before BetaKit Erin worked as Director of Content & Communications at Sprouter from its launch in 2009 until its acquisition by Postmedia Network Inc. She was recently named one of Marketing Magazine's 30 Under 30 in 2012.

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