LevelUp has made numerous changes to its mobile-payments technology as it has aggressively spread its system to new consumers and merchants alike. Today, it is eliminating issues by replacing its older systems and is promoting a white-label app to appeal to more merchants.

Many ISOs have expressed concern about LevelUp because it offers free transactions and makes its money on loyalty programs.

The payments company hit one million users in March, double the number it had three months earlier. As LevelUp adds users, it is deploying a more integrated system at the point of sale, thus removing many of the technology concerns of its earlier approach and making the overall experience more seamless.

"About six months ago we were integrated with 30% of [point of sale] systems, and now we’re at 70%, so we’re making quick progress," says John Valentine, vice president of sales at SCVNGR's LevelUp. "We won’t stop until we’re at 100% percent."

Much of this progress was made when NCR Corp. integrated LevelUp into its Aloha POS system for restaurants. LevelUp's older system is the LevelUp dock, which holds a smartphone that is used to scan a QR code on the screen of the end user's phone.

"The non-integrated dock needs power from a rechargeable battery and 3G internet connection to work, so if the dock isn’t properly charged or there’s an issue with the phone’s 3G internet connection, the merchant will be unable to accept transactions," Valentine says. "These issues are very rare, but they can happen."

LevelUp's current hardware is a standalone device with its own QR code scanner. Because it is meant to be used with the merchant's point of sale terminal, it isn't prone to the issues its smartphone-based approach had.

"When a merchant’s POS is integrated with LevelUp, the merchant uses a LevelUp-branded 2D barcode scanner to accept transactions rather than a LevelUp dock," Valentine says. "The 2D barcode scanner plugs right into the merchant’s existing POS, so it doesn’t require a separate power source or an Internet connection to work, eliminating the problems that I mentioned earlier."

The other major issue LevelUp needs to address is how its payment system is marketed through merchants. Most consumers today use a LevelUp-branded app, but many merchants would prefer consumers use their own app.

“If you’re a brand you want to control the experience,” Valentine says. To this end, LevelUp is promoting its white-label app, which will be used by several more merchants over the next few months, he says.

In February, sweetgreen, an organic salad shop, started using a white-label app powered by LevelUp as its rewards program.

The sweetgreen rewards app lets customers quickly and easily pay with their smartphones while unlocking loyalty rewards. Rewards dollars earned can be used at any of sweetgreen’s 17 locations. And 1% of each purchase goes to a local charity that promotes healthy eating in schools.

Since the app was launched about three months ago, one in five customers began using the rewards app.

“The first day [sweetgreen] had hundreds of transactions and a huge buzz going about the rewards app,” Valentine says.

The rewards app represents 18% of the total transaction volume, which ranks above MasterCard and American Express, says sweetgreen in a press release.

The Washington, D.C.-based restaurant also participated in LevelUp’s “credit card diet” in February, eliminating the use of plastic cards for a day and instead setting customers up with the LevelUp-powered app.

“They’re taking the power of LevelUp and all the tools we provide and putting it behind a beautiful brand they’ve built up over the years," Valentine says.

Sweetgreen customers seem happy with the app. Both the iPhone and Android apps are ranked at between four and five stars in the Apple and Google app stores. And referrals accounted for 12% of sweetgreen rewards users, sweetgreen says.

The app also sped up lines at the salad shop. The rewards app is four seconds faster than cards and 20 seconds faster than cash, says the release.

Sweetgreen declined to provide further details about its experience with the app.

Because of the success of the sweetgreen rewards app, the “white-label custom-built app strategy is very much front and center for us,” Valentine says.

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