LevelUp is eliminating one of the fees merchants pay to accept cards through its mobile-payment system, which uses QR codes to access pre-enrolled debit or credit cards when shopping.

Effective July 12, merchants no longer will pay the Boston-based startup’s 2% “interchange” fee. But they will continue to pay the 35 cents per dollar credit they provide customers in loyalty and incentive rewards LevelUp promotes for them.

For example, if a merchant offers LevelUp customers a $2 discount on their first visit and an extra $5 discount after they spend $50, it will pay LevelUp 35 cents for the initial reward and $1.75 for the subsequent $5 award. If the total spent by the customer is $60, that represents a $1.20 savings by not having to pay LevelUp its interchange fee.

For each purchase scanned with the bar code, the LevelUp app shows the earned reward credit the shopper may apply immediately toward that purchase or use toward a future purchase. LevelUp emails receipts to its users.

LevelUp is backed by Google Ventures, among other investment partners, and was founded by SCVNGR Inc., makers of the mobile-based scavenger hunt social media application.

John Valentine, LevelUp’s head of local sales, sees a parallel in how Google Inc. generates its income. Google provides information for free to users but charges for advertising, similar to what LevelUp is now doing.

“The correlation is almost identical,” Valentine says.

In operation for almost a year, LevelUp has accumulated enough data to demonstrate its new merchant-payment policy can work, he says.

“With the ad campaigns the merchants were running we saw a ton of success in the revenue that was being generated,” Valentine says.

Among LevelUp customers, 64% come back within 30 days, driven by the merchants’ promotions. “So it gets them to come back more and spend more; that’s where the value is provided,” he says.

LevelUp supports merchants’ campaigns through in-store, radio and digital marketing, including promotional stickers, posters and handouts. It recently supported a billboard campaign in Boston that was done in conjunction with merchants and Sovereign Bank to support the city’s Summer on the Waterfront campaign designed to increase business there.

Sovereign contributed by providing LevelUp customers $5 if they scanned a special LevelUp code on subway billboards, and it provided them another $5 if they applied a Sovereign card to their LevelUp account, Valentine says.

Some 3,000 merchants in Atlanta, Chicago, Boston, New York, Philadelphia, San Diego, San Francisco and Seattle now participate, including some well-known brands such as Haagen-Dazs, Johnny Rockets, Antie Anne’s Pretzels and Freshii.

LevelUp processes about $2 million in sales per month, and it processed 153,000 transactions over the past 30 days, Valentine says.

The traditional players in the payments process, including card issuers, will not see a difference in what they earn. LevelUp will use the income it generates to pay issuers traditional interchange for their card transactions, Valentine says.

About 40% of card-payment fraud stems from mag-stripe skimming, which QR code systems eliminate. Moreover, no credit card data are transmitted during LevelUp transactions. Instead, LevelUp sends a token representing the card information to Braintree Inc., which then uses another token to transmit the transaction data to the issuer for authorization.

Braintree provides the vault service for the payments, and BA Merchant Services processes LevelUp’s transactions, Valentine says.

In cutting the risk, LevelUp was able to reduce the fraud-related portion of its merchant-processing fees, Valentine adds.

“We have less risk built into the system, so we were able to drop the discount rate,” he says. “We’ve been live for about a year, and we took a look at average fraud rate and reduced it by 99%. There’s very little fraud in the LevelUp system.”

During a conference last month, at least one person in the audience saw similarities to the LevelUp system and decoupled debit, which backers pitched to merchants as a money-saver because it handled payments over the cheaper automated clearinghouse system.

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