Now Heartland is lending its might to LevelUp, partnering with the mobile payments company to help it roll out its technology across the country. Starting today, Heartland's 800-plus salesforce will begin selling LevelUp's pay-with-your-phone technology to its cross-country merchant network.
It's a major win for LevelUp, whose wave-and-pay mobile app—which generates a secure QR code linked to your credit or debit card—is less than two years old and has signed 5,000 merchants in 25 cities with just a 14-person sales team.
Heartland is what's known in the payments industry as an "acquirer"; its job is to convince merchants to adopt card processing as a part of their businesses. Without these acquirers, it's likely the Visas and American Expresses of the world wouldn't enjoy the ubiquity they do today. They're what LevelUp CEO Seth Priebatsch calls the "muscle" of the industry. Heartland, one of the largest acquirers in the country, processes 11 million transactions a day to the tune of $80-plus billion annually.
Which is why Priebatsch is more excited than usual when he talks about hooking up his mobile payments company with Heartland's network of 250,000 merchant locations. To put the scale of this partnership into perspective, consider Square's much-ballyhooed partnership with Starbucks, which brought Pay With Square support to 7,000 stores.
Then again, Square and LevelUp employ very different product integration strategies—and, mind you, Priebatsch doesn't necessarily view Square as direct competition.
"Square is the most extreme example of this, where they literally want you to throw out your investment in whatever hardware you've got on your counter," Priebatsch says, citing Google Wallet and Isis as other examples of payments services that often require merchants to purchase new hardware and software, rather than completely integrating with existing systems.
Priebatsch's strategy, on the other hand, is to let merchants use whatever hardware and software they want while still removing as much consumer-side friction as possible. That's why when you use LevelUp you get the option of NFC or QR codes.
"An iPad as a point-of-sale is a lot better than some of the existing ones," he concedes. But on the other hand, he says, you can throw a steaming pot of coffee on an ancient-but-"battle-tested" Micros KWS4 9700 and it'll be fine, because that's what it was built to withstand.
I recently caught up with Priebatsch during SXSW, when we met at a sushi kiosk within the Austin Convention Center. The kiosk, along with every other concession stand in the Center and several downtown Austin bars, had been outfitted with LevelUp hardware. Over the course of the festival, LevelUp processed about $35,000 in transactions for 2,500 unique users. And though 2,500 may be a fraction of the tens of thousands who converged upon the city that week, Austin is notably one of two pilot cities that Isis, the payments system created by AT&T, T-Mobile USA, and Verizon, is banking on to serve as an early-adoption hub for its technology. Priebatsch boasts LevelUp wins major merchant contracts against both Google Wallet and Isis, which is accepted at about 650 Austin businesses, "all the time."
Then there are the major credit card companies, which are all heads-down in their own mobile payments solutions: Visa recently added e-retailer giant Overstock.com to its V.me wallet; American Express is pushing "one-tweet shopping" through a recent partnership with Twitter; MasterCard, which has its own MasterPass digital wallet, will begin charging competitors, such as PayPal's, for customers who use MasterCard-linked accounts starting this June. And Visa CEO Charlie Scharf made headlines yesterday when he said it would be "appropriate" for his company to also implement such a fee, though a spokesperson later did an about-face and told The Verge that Visa has no plans to do so.
Now, in conjunction with Heartland, Priebatsch is serious about mass-scaling LevelUp to play with the credit card companies.
"If you think about it, the acquirers are the muscle that actually made credit cards happen in a big way," he says. "This means LevelUp is poised to become a first-class payment type right alongside Visa and MasterCard."
[Image: Flickr user Lotte Grønkjær]