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LevelUp's Mobile-Pay Tech Comes to E-Commerce via 'Connected Apps'

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LevelUp is launching a "connected app" technology that lets merchants tap into its mobile payment system for online commerce and a variety of other uses.

The Web is new territory for LevelUp, which offers a game-like mobile payment system that entices users to revisit merchant stores to earn discounts and other rewards.

Connected apps can also allow merchants to cross-market, such as a fitness app developer providing rewards for a partnered health-food store that accepts LevelUp, says Seth Priebatsch, LevelUp's chief ninja (CEO).

The connected apps technology builds on LevelUp's software development kit, released in early September. LevelUp worked on the connected apps technology for about six months, with the goal of making it straightforward for merchants to deploy and for consumers to use.

"We really had to make something that was very simple," Priebatsch says. "If the user thinks 'that was easy,' then that's what we want to hear."

Priebatsch likens the technology to Facebook Connect, which allows website operators and app developers to link to users' Facebook accounts for simpler logins and easier sharing of data through the social network. LevelUp credits its own use of Facebook for doubling its consumer base in three months.

Priebatsch calls the regular LevelUp SDK "heavyweight" because it embeds a LevelUp app into a merchant app, allowing the merchant site to primarily operate like LevelUp during transactions.

By contrast, "we call the connected apps super-lightweight because they address the one thing the consumer wants to do at that time make a one-time payment," Priebatsch says.

Just as websites use Facebook Connect to breeze past the login process, LevelUp's connected apps allow merchants to handle payments from LevelUp users without a drawn-out enrollment. "It's super easy for one-time payments and no sensitive data exchanges hands," Priebatsch says.

The best and most impressive pieces of technology are invisible, Priebatsch says.

"If I flip the light switch on, it works," he says. "I don't go 'wow' every time, even though it is fascinating technology. We had to simplify the payments experience to that point, but it was hard work to get there."

Connected apps make sense for LevelUp because the company relies on its loyalty program to drive continued business to a merchant, says Richard Oglesby, senior analyst and mobile pay expert with Boston-based Aite Group.

"It could help those merchants to encourage the consumers to come back to their website and earn more points," Oglesby says.

LevelUp's connected apps technology "may not be huge in the immediate term in terms of transactions," but makes sense as a long-term play to get more exposure for LevelUp and give merchants new ways to benefit from payments data.

PayPal operates in a similar manner, Oglesby says, with a PayPal payment option button available on many merchant sites. PayPal also encourages developer creativity through regular "hackathons."

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