LevelUp is ringing in the new year with some big news in an attempt to grow into a leading mobile payments provider. The SCVNGR-owned platform has bagged its first big brand. LevelUp is teaming with Villa Pizza, a national pizza chain with more than 400 locations, to use smartphones, deals and QR codes to entice users to pay with their mobile devices.Mobile payments solution
The announcement coincides with the launch of a Villa Pizza location in Times Square on New Year's Eve. Users will get a $10 LevelUp voucher the Manhattan location good for all day, essentially giving people free pizza while they celebrate 2012. The partnership is also a sign of things to come for LevelUp.
Three Prongs of LevelUp's Strategy for 2012
SCVNGR and LevelUp founder Seth Priebatsch told us in a recent conversation that the payments solution has a three-pronged attack ready for 2012. The company has been moderately successful in the first two items below while the third will be a major focus in the new year:
- Win over consumers
- Build groundswell with local businesses
- Sign more partnerships with large brands and enterprises
Let's break down how LevelUp plans to achieve these three goals.
Win over consumers
Consumers need to be convinced of two things to start using LevelUp as a payments solution: that mobile payments are worth it and that LevelUp deals are worth signing up for the service. Mobile payments will be one of the major stories of 2012 as more technology companies, payment platforms and brands get in on the act. That means step one will be fairly easy to achieve as consumers start looking to their phones as opposed to their wallets more often. The second aspect is trickier as the entire "deals" space has seen a backlash in the latter half of 2012. LevelUp is different than Groupon or LivingSocial though as users do not need to pay anything to get the deals, simply look for participating retailers on their phones. Deals and the very concept of "leveling up" to greater deals is incentive to win over consumers, as long as the payments solution is easy.
Build Groundswell With Local Businesses
We have written about LevelUp and groundswell before. Its approach is very simple: make the service extremely easy to implement and use. LevelUp gives merchants Android phones with QR code scanners and trains them to use the backend of the payments system. In theory, merchants should just be able to scan the code on their smartphone, make a couple clicks and the transaction is done. The bigger trick is convincing the merchant that the deals aspect - giving consumers a free amount of dollars - will benefit their company. It comes down to the same deals logic that Groupon and LivingSocial uses: will consumers come back after the deal runs out?
Sign More Brands
This is where there is going to be a race in the mobile payments space in 2012. The more that startups like LevelUp and Dwolla can sign bigger, national brands, the more people will look to the services as mainstream. LevelUp is approaching the bigger brands from the bottom after building a local base. Platforms like the Google Wallet have been taking the opposite approach and going from the top down, trying to get the big brands first and hope that the local businesses fall in line. This is not a technology issue. LevelUp is based in Boston and has made inroads with its local sales force in the city and also in New York, Philadelphia and San Francisco. The company is bringing in 15 new employees to join various aspects of the company in the first week of January. Some of those new employees will act as regional sales directors in different parts of the country while others will join the operations crew and others will focus on reeling in the big brands.
What it comes down to is that while the local businesses keep money flowing in, the big brands are what will give mobile payments consumer mindshare. Dwolla and LevelUp are working up from the bottom, Google, MasterCard, Visa and the bigger ecosystem are working from the top down. It brings a whole new definition to "race to the middle." Whatever side reaches the most brands first will dominate the late adopters, the lucrative middle.