According to SCVNGR’s blog this morning, we were pretty spot on with our report yesterday around the company’s anticipated “leveling up” announcement.

LevelUp is moving away from daily deals to attempt to be a player in the mobile payments space, targeting small merchants. Their solution, like sources hinted to us over the course of the last week, requires a merchant to purchase point of sale hardware. As a consumer, you link a current payment card to LevelUp and then present a QR Code on your phone to pay. You can also request a physical payment card from LevelUp. Incentivizing consumers to pay with LevelUp are progressive discounts on a merchant specific basis.

Here is how SCVNGR/LevelUp is touting the solution to consumers as “the better way to pay” (at, right now, 7 locations in Boston, and more promised at a rate of 5-10 new merchants a day going forward):

• Save Today: Anytime you visit a place for the first time on LevelUp there’s $5, $10, $20 in credit waiting for you to spend on whatever you want. To use it, just pay with LevelUp.
• Save Always: Whenever you head back, just keep paying with LevelUp and you’ll progress towards unlocking more credit and saving even more.
• Save Time: And did we mention that you can pay with your phone? (Or a LevelUp card.) Get instant digital receipts. Save money and save the planet!
• Save Everywhere: LevelUp works at hundreds of places in Boston + Philly with more going live every day. So pay with LevelUp everywhere: http://TheLevelUp.com/browse

For merchants, SCVNGR/LevelUp is promising 20-30% less in card fees and “social CRM” information around users. We are investigating exactly how they are promising these lower fees; however, the page for merchants to learn more about the solution is currently blank.