LevelUp: We’re ‘Android,’ Square is ‘Apple’

You want vision? LevelUp CEO Seth Priebatsch says his loyalty/transaction marketing company will emerge as a partner for SMBs — think authentication, orders and refunds and analytics — in the same way that Facebook Connect is a partner for media sites.

LevelUp, of course, doesn’t have the loyalty/transaction marketing space to itself. We are tracking more than 30 companies in the space, including such players as Google Wallet, ISIS, PayPal, First Data Offerwise, Groupon Rewards, Swipely, Punchey, Cartera, Cardlytics and Edo. But LevelUp is winning traction with 5,000 merchant locations; increased share of payments at those locations; and one million users. (see our recent coverage of its sales partnership with Heartland Payment Systems.)

Speaking during an analyst presentation, Priebatsch positions it as a two horse race between LevelUp and Square, which gets most of the buzz in the space. It is, at the least, clever positioning.

LevelUp is pursuing an “open,” Android-like position that can be embraced by the POS community, the acquirer community, and large and small retailers, says Priebatsch. Larger retailers especially need to have a platform that they can customize. That compares favorably to the “closed” Apple-like (and threatening) position of Square.

Big changes, however, are afoot in the competitive landscape. Indeed, the landscape will change dramatically when Facebook and Amazon inevitably enter the space. “I’d find them much more frightening than the crew that exists right now,” says Priebatsch.

Like LevelUp, which relies on advertising revenue and loyalty redemptions, their business models aren’t dependent on mobile payments and the margins from payment processing, “although (mobile payments) are cool for the ubergeek.” They are more focused on advertising (Facebook) and upselling and distribution (Amazon).”

Priebatsch will be a featured speaker at BIA/Kelsey’s Leading in Local: SMB Digital Marketing event in Austin Sept. 11-13, along with First Data SVP for SMB Jim Contardi. Register here.