While Square may have been first out of the gate, they continue to launch a complex attack aimed at dominating the new payments playing field. LevelUp may just have the advantage by choosing a pointed attack designed to win the hearts and minds of merchants. Without the support of merchants, any new payment system will be relegated to second string, if not the bench.
The key to this bold attack is interchange zero, meaning merchants pay zero interchange fees for processing their payments. In today’s competitive environment, zero goes a long way to winning merchant loyalty. Payment startup Dwolla has tried this zero fee approach, but their lack of substantial investor support still buries them in the Silicon Prairie coffee shop league.
In addition, LevelUp is strategically recruiting college students as their sales force to enlist new merchants and spread the word to their classmates. Does this sound like any recent successful start-up like maybe Facebook?
In addition to zero interchange fees, LevelUp is also focusing on business analytics that can help their small merchants understand what their customers really want. Analytics are key to growing any business, but most small businesses lack the time or desire to collect all the relevant information.
If LevelUp can close this gap in business analytics, drive demand through college student recruitment and save the merchants money, they could become a big player in the shift to mobile commerce.
Read the full article on the new investment in LevelUp.