LevelUp's software development kit (SDK), released last week, allows companies such as Zuppler to add mobile payments without drawing users away from the merchant's branded mobile app.

"Consumers love the fact they can order online with Zuppler and then pay with LevelUp; [the SDK] fills a void that was there," says Shiva Srinivasan, founder of Zuppler.

Zuppler provides an online ordering platform that restaurants can integrate into their websites. It is currently beta testing the LevelUp SDK from LevelUp's parent company, SCVNGR. An SDK is a packaged set of tools that make it easy for developers to integrate the functions of another company's app.

"For the end users it's a seamless experience," Srinivasan says.

Zuppler's customers include merchants that have a strong brand but want to branch out to the online and mobile channel, Srinivasan says. Merchants come to Zuppler for its online ordering service and are now able to support mobile payments through LevelUp.

LevelUp allows consumers to link their card products to the mobile app, which then generates a unique QR code which is scanned at the point of sale to make a purchase. Consumers get rewards for paying with LevelUp, and the company offers an Interchange Zero model to merchants, meaning they pay for loyalty programs but not per transaction.

More than 50 apps are already being developed with LevelUp's SDK, including Route 802, a tourism and exploration app that is integrating take-out via Zuppler and mobile payments via LevelUp. Sebastian's Café, a Boston-area café that is not a Zuppler client, is also integrating with LevelUp.

LevelUp's partnership with Zuppler began after the companies discovered they have many of the same clients, says Srinivasan.

LevelUp has kept its avenues open, playing nice with banks, including building the white-label FT Pay app for First Trade Union Bank and partnering with many merchant services businesses. LevelUp also created a white-label app for sweetgreens, an organic salad shop based in Washington D.C.

This year LevelUp has made relationships with some large partners to expand its reach. LevelUp partnered with Heartland Payment Systems, which has marketed the mobile payment app to its 250,000 merchant locations. LevelUp also partnered with Chartwells Higher Education Dining Services to bring mobile payments to thousands of college students.

Plus to further proliferate in the restaurant industry, LevelUp works with NCR Corp. and pcAmerica. As it expands to new consumers and merchants, LevelUp is replacing old systems with its new standalone devices for reading QR codes from smartphone screens.

"Merchants are interested in leveraging mobile to exert greater control over the customer experience and that's exactly what integrating payment functionality into existing applications can help accomplish," says Jordan McKee, an analyst with Boston-based Yankee Group. "Undoubtedly, there is growing momentum behind merchant-led payment apps and LevelUp is aiming to capitalize on that trend."

More than a third of mobile device owners agree that if points were automatically added to loyalty cards it would convince them to use a mobile payment application, according to the Yankee Group's June 2013 U.S. Consumer Survey. And 27% of mobile device owners have already used a merchant mobile app to pay for items.

"Releasing an SDK allows LevelUp to monetize its existing technology by converting it into a high-margin product," says McKee. "It's quite possible that income generated from LevelUp's SDK could easily outpace the revenue generated from the marketing side of its business."

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