NYC Coffee Shop's Latest Blend: ShopKeep, LevelUp Mobile Payments

ShopKeep, which provides an iPad point of sale system, began supporting payments from SCVNGR's LevelUp loyalty and mobile payment system this week. One early adopter is already reporting success with the combined system.

ShopKeep announced plans to integrate with LevelUp in September of last year, and The Bean, a New York City-based multi-chain coffee shop, started using the integrated system in December.

In less than two weeks, 30% of customers using the LevelUp payment system through the ShopKeep POS terminal return to the store, according to LevelUp. Those customers have been to The Bean five or more times to receive the 1% discount the retailer offers.

LevelUp allows smartphone users to make payments at the point of sale by presenting a quick-response (QR) code in front of a special scanner. LevelUp does not charge for payments. It instead charges for use of a loyalty system to attract new business.

The Bean has been using ShopKeep's cloud-based system for three years and has separately used LevelUp for about a year. The retailer switched to ShopKeep from Par PixelPoint, which used in-store computers.

"We benefit from the [ShopKeep] system because we're able to get information from wherever we are whenever we need it," says Ike Escava, the owner of The Bean. With the old system, reports would have to be created at the store, slowing down registers and sometimes crashing the system, he says.

"ShopKeep is a much more stable system," Escava says. The LevelUp integration "is a great addition because now we don't have to account for sales from LevelUp in a separate system but instead we put numbers together at the end of the day for reconciliation."

The terminal and scanner also provide a quicker checkout for consumers, says Escava. Before, while The Bean was using LevelUp independent of ShopKeep, the retailer was allowing customers to scan their QR codes on a smartphone provided by LevelUp.

"I believe the reason ShopKeep integrated with LevelUp is because its customers were requesting it," Escava says. "It's been a pleasure dealing with a company that listens to its customers and is so responsive."

ShopKeep's system benefits from the simplicity of working with tablet-based and cloud-based technology, says Jason Richelson, CEO of ShopKeep.

"iPads are a much more stable platform with fewer moving parts," Richelson says. "What you're going to see over the next 3 to 5 years is a huge sea of change as people start upgrading terminals that want better efficiencies for managing … and there's better functionality in cloud systems."