Square and LevelUp Extend Platforms Beyond In-Store Sales

  • Philip Ryan
  • February 27, 2014
  • 1

chinese_foodHungry for payments innovation? Great! Will that be for pickup or delivery?

Two payments startups, Square and LevelUp, announced extensions to their platforms today that take them beyond the point-of-sale, and both have to do with ordering food.

Square already has services beyond the point-of-sale, such as Square Cash, a person-to-person payments service, and Square Market, an online emporium powered by Square. The San Francisco-based payment processor is now piloting Square Pickup, a service that lets users order and pay for items using the Square App. The item is then readied for pickup at the store.

The next logical step, of course, would be Square Delivery.

Square Pickup is being piloted in 11 San Francisco restaurants and puts Square in competition with Seamless, which recently filed to make an initial public offering, and similar apps, but it could certainly extend beyond just food in the future. If Square began delivering items from Square Market sellers, it would be getting into Amazon territory. And delivering from brick-and-mortar sellers would certainly be a service payment processors like First Data do not offer.

Square also acquired online scheduling and appointment app BookFresh this week, and while the companies are being kept separate for the moment, this move could indicate a larger anticipated role in this pickup/delivery market. Square could also offer BookFresh’s service to its small business clients.

LevelUp, meanwhile, is stepping from mobile to online, where it is partnering with online ordering service Foodler. LevelUp specializes in restaurants, and both companies play in rewards, so the services are highly compatible. What is unusual about the move is that LevelUp’s focus until now has been at the point of sale, where it made a strong push to sign merchants to use its service. Anecdotally, in the Financial District of New York, where Bank Innovation is located, many merchants abandoned their LevelUp systems by mid-2013, with staff telling customers, “It doesn’t work,” or “I don’t know what it [the LevelUp barcode scanner] is.”

LevelUp is framing this move not as a retreat from the mobile POS experience, but rather an extension of its platform, allowing customers to reap rewards from a wider network and with delivery rather than just store sales.

It looks like both LevelUp and Square think that the way into customers’ (and merchants’) hearts is through their stomachs.

Learn more about what’s next in banking at Bank Innovation 2014 on March 3-4 in Seattle. Request an invitation here.

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Philip Ryan is Senior Editor of Bank Innovation and Senior Director of INV Fintech. He began covering financial services in 2012 and has more than 15 years' experience in online journalism, which makes him quite old. He can be reached at pryan@royalmedia.com.

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