Mobile Payment Platform Wars: LevelUp, Paydiant, PayPal, & More

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in mobile payments; PayPal is particularly interesting locally because its Boston office, with its DNA from the acquired startup Where, is all about mobile and analytics.

Adjacent to startups like LevelUp and Paydiant are companies like Foursquare and Swipely, which are increasingly pursuing retail marketing, loyalty, and analytics. And plenty of other startups such as Dwolla and Plastiq (which recently raised $6 million in venture funding) are trying to enable new kinds of online transactions. Leaf and WePay are also interesting players; the latter just rolled out a mobile-payment app for small businesses last week.

There are overarching issues around who will own the customer data and relationships—and, of course, around consumer privacy. Big retailers want consumers to use their branded apps (think Target, Walmart). Banks want people to keep their money in bank accounts, not PayPal (which also competes with credit cards). Payment networks want to integrate with everyone. Local merchants want something that works reliably and brings in new and repeat customers.

The consensus seems to be that mainstream adoption of mobile payments is still a few years away. “It’s going to take a while,” says Gardner, who points out that consumers will have to overcome “50 years of muscle memory on swiping plastic.”

Nevertheless, local startups are making progress. LevelUp recently passed 1 million users, a figure that Priebatsch calls “significant to our merchant customers.” He adds, “People who ignored us a year ago, we can say, ‘Consumer mindshare has shifted.’ Now it’s a real adoption curve.”

And the race is on, as he says, to become the default leader in the sector. “We’ve got this year to be the best and then, if we pull that off, 2014 will be the year of expansion,” Priebatsch says.

As befits his app (and company) name, he adds, “We haven’t hit a level where we can rest or be comfortable.”

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Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] Follow @gthuang

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