Last month, the team behind location-based gaming platform Scvngr unveiled LevelUp, a service that enables users to make mobile payments via QR code. By linking a credit or debit card to the system, consumers get their own custom QR code, which they can scan at hundreds of participating merchants in Boston, Philadelphia, San Francisco, and New York to make purchases, participate in merchant loyalty programs, and receive rewards. Today, the company is taking the platform one step further by partnering with carrier T-Mobile, which will provide wireless and transactional infrastructure for participating businesses.
The idea here is to create a seamless system for both merchants and consumers. To use other services in the space such as Square or Google Wallet, users had to either have certain peripherals (like the Square dongle) to make the system work or purchase a particular device (like an NFC-enabled smartphone). Scvngr has streamlined this process—most every popular smartphone will work with the service—and T-Mobile is helping them to bring LevelUp nationwide.
If you happened to be in a local AT&T, Verizon, or T-Mobile store recently in the Cambridge, Massachusetts area, where Scvngr is based, you might've seen Scvngr founder and chief ninja Seth Priebatsch and crew ransacking the place of devices to test out LevelUp. The team "pillaged the shelves," as Priebatsch says laughing, filling shopping carts up with Android and other pay-as-you-go phones, which they then tested to make sure the LevelUp system could be universal.
"We want to go with the lowest common denominator—if your phone has a screen, you can pay with LevelUp," says Priebatsch, who will discuss the service today at Fast Company's Innovation Uncensored conference. "We needed a network and infrastructure that could power all this—T-Mobile said they could help, by providing and distributing devices, and providing back-end connectivity."
LevelUp takes advantage of the same game mechanics that Scvngr is known for. While the Scvngr app combines game mechanics and social, Priebatsch says LevelUp integrates game mechanics and transactions. In other words, what games merchants can play to win over customers—that is, offering incentives to first-time customers, who can earn rewards for participating, say $10 for every $100 spent. On the back end, the merchants have access to detailed analytics and data, which they can use to adjust to maximize business. (LevelUp charges merchants a typical, low transaction fee, as well as a monthly cost of $55.)
And even in its infancy, the program is starting to see huge results. According to Priebatsch, within a 30-day period across the LevelUp ecosystem, 40% of all new customers returned, a number that has risen with each new 30-day period.
"It's mindblowingly awesome," he says, smiling.
[Image: Flickr user anuko]