LevelUp Mobile Payments Looks To Take On Much Larger Competitors

The concept of mobile payments is steadily gaining ground in business. Small business owners will be increasingly under the gun to have the necessary infrastructure in play to take that field on, and LevelUp will prove to be one more potential app for small business to handle in the form of LevelUp.

LevelUp, recent beneficiary of a $9 million bout of funding from Deutsche Telekom’s venture capital division, T-Venture, now has a hefty $21 million in its war chest and a little extra executive firepower in the form of Randeep Wilkhu, Senior Manager of T-Venture, who has joined the board as an observer. That’s going to give the young company a lot of extra staying power, staying power it will need against a growing number of competitors. But what else does LevelUp have in its favor?

While LevelUp may be a startup, it’s not just getting started. The app itself can be used with fully 3,000 different merchants, including Ben & Jerry’s, Johnny Rockets, and Quizno’s. There are over 200,000 users so far, and they’re spending a combined total of $2 million per month with LevelUp. LevelUp is also looking to expand, set to hit 50 different cities by the end of 2012, with plans to hit major national chains before winter fires up in earnest.

The app itself isn’t exactly a bellringer in terms of use; LevelUp merchants ultimately pay 35 percent to LevelUp every time a customer redeems first-time or loyalty program rewards. However, they’ve also lowered the merchant exchange rate–otherwise known as the swipe fee–to zero, making it a compelling choice indeed. And, given the sheer amount of users so far that are already involved with LevelUp–not to mention the sheer amount of money they’re spending–it provides a clear mandate for small businesses to get involved with at least some kind of mobile payment system, whether it be Square, Google Wallet or LevelUp.

It’s not just mobile payment tools that will help make a small business grow, either; cloud-based telephony tools will go a long way toward making that happen, including local numbers and toll free services, which allow potential customers to get a hold of a small business much more readily. This in turn makes a business more likely to bring in more customers and, from there, profit.

LevelUp may not be the mobile payment system of choice for most small businesses, but it’s certainly one to consider, and one that may be one to include in an overall strategic view.