Today Boston-based mobile payments company LevelUp announced it has partnered with First Trade Union Bank (FTUB) to create a custom FTPay payment and loyalty app for the financial institution. It’s LevelUp’s first branded bank app, and is currently under development with a release scheduled for early 2013 on both Android and iOS platforms. FTUB also has its headquarters in Boston, and primarily serves small businesses, government clients, and consumers.
LevelUp’s mobile payments and loyalty solution lets consumers pay via the LevelUp smartphone application or LevelUp-powered third-party apps, by linking their credit or debit card and paying in-store either via NFC or QR code. Merchants can integrate LevelUp into their own point-of-sale (POS) solution, with support for POS systems including MICROS, POSitouch, and Dinerware. Or merchants can use LevelUp’s counter-top hardware to process payments if they don’t want to integrate it with their POS system, or don’t have one.
The company first launched its white label solution in September, letting merchants build custom mobile payments apps on top of LevelUp’s infrastructure instead of using the API or letting consumers pay via LevelUp’s apps. Companies can either work with LevelUp’s development team to build the custom apps, or use the company’s software development kit (SDK), which is expected to launch in January 2013. The custom apps cost between $40,000-$50,000 per platform, with a one-time $5,000 fee to use the SDK.
First Trade currently has an iPhone app and mobile web banking, and this app connects either with a customer’s First Trade Union Bank Debit Card, or with their account credentials. Once they download the app and connect their account, consumers will be able to pay via LevelUp at any supported merchant, currently numbering over 4,000 across the U.S. Customers will also get access to LevelUp’s loyalty and rewards features, unlocking deals as they pay at LevelUp-supported locations.
LevelUp founder Seth Priebatsch said in an interview that First Trade approached LevelUp after they launched the white label program. “We’re launching the first white labelled mobile payments app functionality for really any bank in the country,” he said. ”My hope is that it’s the first of many. We actually got approached by a number of different banking institutions, who all wanted to, and many of whom still want to, claim the mantle of first to bring real mobile payments to their customers.”
Aside from the fees it charges for white labeled apps, LevelUp’s primary revenue stream is its loyalty program, charging merchants $0.40 of each dollar they make via a LevelUp campaign. Unlike other mobile payments solutions like Square and PayPal Here, the company doesn’t charge a transaction fee for payments processed on the platform. Priebatsch said the FTPay app will feature a mix of new offers at local businesses that First Trade will create, as well as existing offers from LevelUp merchants, aimed at both existing and potential customers. They’re also planning to use existing transaction history to create relevant recommendations, which could be the biggest opportunity for First Trade.
Other mobile payments companies are also looking to create mobile loyalty and rewards partnerships, with Starbucks partnering with Square in the summer, and launching the ability to pay with Square’s Wallet app in over 7,000 locations as of November 2012. Then there are the myriad other options for mobile payments, from the recently-launched Isis solution, backed by U.S. wireless carriers including Verizon, as well as Google Wallet, MasterCard’s PayPass, and Visa’s V.me solution.
“In some respects LevelUp competes with Square, competes with Google Wallet, competes with Isis, but in a lot of other respects we’re all kind of in the same boat together trying to make mobile payments a thing,” he said, adding that he thinks this partnership will help increase consumer trust in the safety of mobile payments. With no one standard for mobile payments, the door is wide open for companies like LevelUp to gain footing. Partnerships like the one with First Trade will likely help get both consumers and merchants on board with their solution.