To get into consumers' hands, a nascent mobile payment system might first want to get into their hearts by partnering with charities.
SCVNGR's LevelUp, which announced a charitable-donation option today, is not the first to spot a link between charities and mobile spending and rewards. Shopkick's mobile rewards app began life in 2009 as CauseWorld, which had a strong focus on donating any rewards earned to charities.
Working with charities can provide "a good jump start for LevelUp," says Alex Shuck, SCVNGR's marketing manager for online and strategic partnerships. "It tells more people what LevelUp is."
Partnering with charities proved a successful approach for shopkick. Its CauseWorld app became the fastest-growing location-based retail app in Apple's app store within weeks of its launch, Jeff Sellinger, co-founder and chief product officer of shopkick, stated in an e-mail.
Shopkick phased out CauseWorld with the 2.0 update to its shopkick app, which rewards users for visiting and spending money at retailers, Sellinger says. Shopkick users can still donate their rewards points to charity.
"CauseWorld helped prove that consumers like to do more than just texting and talking with their cell phones when they are out shopping," Sellinger says.
CauseWorld had 550,000 downloads in five months, and 1.5 million unique locations that consumers visited to earn rewards points, Sellinger says.
Currently, LevelUp has only three charities involved during an eight-week "soft rollout" of the feature, Shuck says. Feeding America, Jumpstart and the Massachusetts Democratic Party are listed as LevelUp donation options.
SCVNGR seeks more charities to get involved and help promote its system.
"We have made it as simple as possible for charities to get involved," Shuck says. "They contact us and provide information about the organization, and we check on their certifications and to ensure they are giving the donations to their specific causes."
LevelUp's new "Causes" option lets consumers give charities the funds they receive as rewards for making a payment with the LevelUp app.
Consumers launching the LevelUp app would tap the "Donate" section under settings to find a list of the various charitable or non-profit organizations currently on LevelUp. They would determine what percentage of money saved on transactions would go to the charity of their choice.
"We really wanted to give our users the opportunity to donate while they were saving money," Shuck says.
In that way, the Causes feature allows users to provide a portion of their savings much in the same manner they may tell a point-of-sale clerk to "keep the change" on a cash transaction or drop coins in a donation bucket, Shuck says.
Every mobile wallet or mobile payment developer is trying to find an angle to get closer to the consumer, says Maria Arminio, president of Avenue B Consulting Inc., a Redondo Beach, Calif.-based payments management consulting firm.
In LevelUp's example, "there is a parallel here with credit cards, of which some have always had a charitable donation option attached," she says.
While a certain segment of consumers may look for an easy way to make donations to their favorite causes, SCVNGR's few charities may not yet be enough to win over many consumers.
"The key for LevelUp, it seems, would be getting more charities on board that people will support," she says.
To participate in Causes, merchants "don't have to do anything else" other than sell their products, Shuck says. LevelUp takes care of moving the donation to the registered charity and verifying the donation with the consumer, he says.
Last month, LevelUp eliminated its 2% transaction fee for merchants, while charging a 40-cents-per-dollar rate on credit they provide customers in loyalty and incentive rewards programs that LevelUp promotes.
This week, LevelUp announced it is adding an app for Windows Phone users. The mobile payment system already supports iPhone and Android handsets.