Heartland Payment Systems and SCVNGR's LevelUp are taking their merchant services and payments bundle, which they earlier tested in a handful of cities, nationwide.
Heartland's 800-person sales force will market LevelUp's mobile payment and loyalty system to its 250,000 merchant locations. For both companies, there's a chance to alleviate market pressure. Heartland can dive deeper into mobile commerce to guard the encroachment of alternative mobile payments providers. And LevelUp can benefit from a being able to target a large base of new merchants.
LevelUp makes its money through an offer program that brings new business to merchants. These offers are based on ad credits, and LevelUp charges a fee when these credits are redeemed. The company does not charge for payments — it calls that model "antiquated" — so it must add new merchants to its system to grow.
"The biggest challenge facing mobile payment companies right now is scale," said Chris Mahl, LevelUp's chief revenue and strategy officer, in a release. "LevelUp has been able to reach 1 million users and 5,000 merchants relatively quickly, but we need even wider consumer and merchant adoption."
LevelUp leverages Heartland's multi-site authorization and settlement network. Heartland will offer the LevelUp app to merchants, and the two companies will promote white-labeled apps for businesses with multiple locations. Heartland and LevelUp will also absorb 25% of the development cost of a white-labeled iPhone and Android app for merchants with 10 or more locations that switch their processing to Heartland, or extend their existing processing relationship with Heartland.
"The partnership provides consumers with another method of payment acceptance while merchants have the opportunity to further increase their bottom lines by meeting the payment demands of today's tech-savvy consumers," said Ian Drysdale, president of Heartland's network solutions group, in a release.