Ever since mobile payment pioneer Square started making huge waves in the industry, everyone started swarming into the nascent segment of allowing smartphones to be turned into makeshift credit card terminals. And thus began a war from service providers to offer the lowest possible credit card swipe fees and still be profitable. So you knew this day had to come.
That is, the day when a company would step forward and charge a 0% fee for processing credit card transactions. That's LevelUp, from Boston company SCVNGR. It's a QR code-based mobile payment app that previously charged users a 2% fee for all credit card purchases. That was already among the lowest in the business, but SCVNGR thinks it can change the way the entire business model works.
"We think we’ve actually got the model that obviates the need for Interchange to be how payments make money. We think that this is an economic inevitably," company CEO Seth Priebatsch said in a VentureBeat interview. Square, by comparison, charges a 2.75% fee for every credit card swipe. So how does LevelUp make money? The idea is to monetize customer acquisition and customer loyalty campaigns, with LevelUp only making money when those campaigns pay off - but if they do, it can lead to much more than a measly 2.75%. Read more in the via link below.