A number of startups are facing large banks with new apps that offer modern mobile banking experiences, innovative functions and reduced or even no fees. Entry into this now crowded market is Level, a challenger bank and banking app with benefits like 1% cashback on debit card purchases, 2.1% APY on deposits, early access to paychecks, and no fees.
The banking service is the latest from the same team behind the zero debit credit card aimed at millennials who want to take advantage of credit without the potential for additional spending. As Zero, the company completed $ 20 million in Series A financing last year from SignalFire, Eniac Ventures and Nyca from New Enterprise Associates (NEA), bringing the total increase to $ 35 million.
Similar to Zero, Level is also aimed at a younger population – in this case, those who no longer need physical banks if they only need a bank account, a useful app and a debit card. Today there are several of these types of banking services to choose from. For example, in the USA there are Simple, Ally, Chime, Varo, N26, Current, Space, Step, Stash, Empower and others.
Level also faces these competing challenger banks by offering a higher APY of 2.10% on its FDIC-insured deposits without requiring a minimum balance. The company finds that this is 35 times the national average based on U.S. bank balances with balances less than $ 100,000.
It is also a popular feature among credit card users as it offers 1.0% unlimited cash bank for debit card spending. This cashback applies to both signature-based and online purchases and is paid into accounts with a monthly direct deposit of at least $ 1,000. To be clear, a signature-based purchase means that you choose "credit" instead of "direct debit" when paying at the point of sale. This determines how the merchant processes the transaction and what fees he pays. In the case of Level, some of these fees are returned to customers as a "cashback" option.
Level likely relies on the fact that running a card as a credit requires an extra step. Customers skip this if they are in a hurry and instead debit the card. This allows Level to keep the fees to itself.
Like many challenger banks, Level offers early access to your paycheck. For customers with a direct deposit, Level provides the money based on the time of receipt, which can be up to 2 days earlier.
Like most other bank startups, Level leaves the numerous fees that big banks charge behind. According to the level, there are no monthly overdraft fees, international business or additional ATM fees, and no minimum balance is required to have an account. ATM fees are even refunded up to three times a month worldwide, up to $ 4 per refund to relieve the ever-increasing fees for accessing your cash.
Level also includes features that are now part of the basic experience for Challenger banking apps, such as: These include showing transactions on a card, blocking a missing debit card in the app, and receiving push notifications for purchases, refunds, and transfers.
The app itself has a clear, modern, almost minimalist design that makes it easier to understand and navigate. Unfortunately, for this terrible design trend, it chose to use an overly lightened gray font on a white background. This could deter older customers because the screen is more difficult to read.
What is missing, however, are the more robust functions for invoice, cost and target planning, which are offered by other banking apps such as Simple, Empower or N26 and which help users to better plan both recurring expenses and long-term goals.
However, like most (but not all) of the digital banks operating in the United States today, Level itself is not a bank. His clients' funds are actually held in FDIC-insured accounts (up to $ 250,000) through Evolve Bank & Trust. Meanwhile, Level offers the technology, customer experience and banking services.
"Level was designed to challenge the status quo in banking and end the era of big banks that hold people's money and offer them no interest, no clunky app experience, and no frustrating customer service," said Bryce Galen, Level's founder and CEO made a statement. “Level is able to offer customers dramatically better rewards and interests, a design-oriented app and superior customer support. Our goal is to revolutionize the way people handle their finances on a daily basis, ”he added.
Level is available for both iOS and Android today after you first signed up for levelbank.com