The Washington Post published an article on August 23rd, entitled “Will mobile payment fees reach zero?” Apparently there is a brand new company called LevelUp that offers free mobile payment processing. They currently have 3,000 companies across the United States processing payments through them. This probably means this company is incredibly small, unprofitable and venture funded. As far as I can tell they are hinging the success of their business model on being able to sell customer transaction data to other companies as well as sell advertising. They essentially have to eat the several percent transaction fees that companies like Visa, MasterCard, American Express, and Discover charge and then more than make up for the cost of that by selling the services above. This is a high risk business plan that costs a lot of money to setup – yet it certainly is very interesting. The question is – is this business a viable and secure way to accept mobile merchant service payments? Time will tell.
