Level launches a mobile banking app offering 1% cash back on debit purchases, 2.10% APY

As Zero, the company last year closed on $20 million in Series A funding from New Enterprise Associates (NEA) SignalFire, Eniac Ventures, and Nyca, …

A number of startups are taking on big banks with new apps that offer modern, mobile banking experiences, innovative features and reduced or even zero fees. Entering this now-crowded market is Level, a challenger bank and banking app with advantages like 1% cash back 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 “debit-style” credit card called Zero, aimed at millennials who want the benefits of credit without the potential for overspending. As Zero, the company last year closed on $20 million in Series A funding from New Enterprise Associates (NEA), SignalFire, Eniac Ventures and Nyca, bringing its total raise to date $35 million. It now has tens of thousands of users.

Similar to Zero, Level also targets a younger demographic — in this case, those who no longer see the need for physical banks, when a bank account, useful app and debit card is all they need. Today, there are several of these sorts of banking services to choose from; in the U.S., for example, there’s Simple, Ally, Chime, Varo, N26, Current, Space, Step, Stash, Empower and others.

Level takes on these rival challenger banks, too, by offering a higher 2.10% APY on its FDIC-insured deposits, without requiring a minimum balance. The company notes that’s 35x the national average, based on U.S. bank balances with a less than $100,000 balance.

It also snags a feature popular with credit card users, by offering 1.0% unlimited cash bank on debit card spending. This cashback applies to both signature-based and online purchases, and is paid out on accounts that have at least a $1,000 monthly direct deposit. To be clear, a signature-based purchase means you select “credit” instead of “debit” when paying at point-of-sale. This determines how the merchant processes the transaction and the fees it pays. In Level’s case, it’s sharing some of those fees back with customers as the “cash back” option.

Level could benefit from consumers believing that running a card as credit takes an extra step. In some cases, customers may skip this when they’re in a hurry and run the card as a debit instead — allowing Level to keep the fees for itself.

Like many challenger banks, Level offers early access to your paycheck. For customers with a direct deposit, Level will make the funds available based on when they are received, which could be up to two days early.

Also like most other banking startups, Level ditches the numerous fees big banks charge. There are no monthly, overdraft, foreign transaction or add-on ATM fees, says Level, and no minimum balance is required to have an account. It will even reimburse ATM fees worldwide up to three times per month, at up to $4 per reimbursement to take the sting out of the increasingly costly fees to access your cash.

Level additionally includes features that have now become part of the baseline experience for challenger banking apps, like being able to see transactions on a map, lock a missing debit card from the app and receive push notifications for purchases, refunds and transfers.

The app itself has a clean, modern almost minimalist design, making it simple to understand and navigate. However, it sadly opted for that terrible design trend of using an overly lightened gray font on a white background. This could put off older customers, as it makes the screen harder to read.

However, where it’s lacking is in the more robust bill, expense and goal planning features offered by other banking apps like Simple, Empower or N26, for example, which help users better plan for both recurring expenses as well as long-term goals.

However, like most (but not all) of the digital banks operating today in the U.S., Level itself is not a bank. Its customers’ funds are actually held in FDIC-insured accounts (up to $250,000) through Evolve Bank & Trust. Level, meanwhile, provides the technology, the customer-facing experience and banking services.

“Level was built to challenge the status quo in banking and put an end to the era of big banks holding people’s money while giving them no interest, a clunky app experience, and frustrating customer service,” said Level founder and CEO Bryce Galen, in a statement.

“Although several challenger banks have launched in recent years and most compare favorably to traditional banks, surprisingly few of them deliver a strong enough customer value prop to truly compel people to switch their primary banking,” Galen told TechCrunch. “For instance, Square Cash has a reliable app with rotating cash back perks, but lacks FDIC insurance or phone customer support. Chime has FDIC insurance and phone customer support, but lacks meaningful customer rewards or 24/7 support availability,” he continued.

“Level addresses this by leveraging the technical foundation, team experience, and bank partner deals that undergird Zero to deliver better customer value across all these dimensions — app, support, and economics — in a highly accessible product,” Galen said.

Level is available today on both iOS and Android, after first signing up on levelbank.com or on mobile.

Updated 2/19/20, 3:15 PM ET with further comments from Level.

Instagram star on how ‘house plants and matcha lattes’ left her £25000 in debt

… 40s collectively spend £400 million a month to mimic their favourite social media influencers, according to credit referencing agency Credit Karma, …

Social media has opened doors for thousands of people – from single mums, to artists who have launched their careers on the back of a YouTube channel – but what’s the downside to living your entire life on the internet?

Well, one mum says it’s debt – and more than a decade later, she’s still fighting her way out of a £25,000 black hole.

And she says Instagram is part to blame for it – after being sucked into the app’s endless stream food, holidays and friends – a recipe for disaster for anyone’s bank balance.

She’s not alone either. The anonymous Instagrammer, who runs the My Frugal Year page, is one of many people addicted to the ‘influencer lifestyle’ – which according to a new report, would require a salary of £1.7million.

Under 40s collectively spend £400 million a month to mimic their favourite social media influencers, according to credit referencing agency Credit Karma, but as many as seven in 10 are going into debt as a result – using credit cards, overdrafts or personal loans to finance their spending.

With over £25,000 debt spread across seven credit cards, two cars on finance, a loan with just under two years left and a £2,000 overdraft, My Frugal Year says this year, reality hit home.

“I started accruing debt more or less as soon as I was old enough to get an overdraft, and it spiralled throughout my 20s,” the mum, who runs her page anonymously, said.

“I don’t think I ever quite understood the gravity of the situation, or that it wouldn’t just be solved by the higher income I was always chasing.

“In recent years, the pursuit of Instagram perfection has really compounded the problem – the ‘it’ dresses, the trendy houseplants, the matcha lattes…

“Every now and again I would panic and try to pull myself together, but my resolve would crumble as soon as I was faced with something I wanted.”

She says it wasn’t until March this year when her debt became ‘crippling’ to the point that she had to get her head out of the sand.

“It wasn’t until March of this year when the repayments got to a point where they were crippling us, that I realised that I really didn’t want to continue eroding our chances of financial security all the way through my 30s.”

Her debt started in her twenties [stock image] (Image: Getty Images)

So she closed her Instagram account and reopened a new one, blogging her financial troubles from start to finish.

“I started my Instagram account as a way of holding myself to account, set out a basic but realistic budget, cut back on most non-essentials and now, seven months later, I’ve paid off almost 20% of my total debt.

“I’m not really aiming for zero – I might always have a car on finance or a couple of hundred quid on a credit card at any one point, but I want to know that I’m in control, and for it not to be life-limiting.”

Have you been thrown into debt by social media? Get in touch: emma.munbodh@mirror.co.uk

“Social media is smoke and mirrors; it’s almost impossible to determine what is real and what is not. However, what is real is being aware of your own spending limits and being in control of what you spend. behavioural psychologist, Jo Hemmings, said.

“Many of these ‘social celebrities’ have either been gifted these items or have been paid to promote them. You can see whether there is formal promotion behind a post by looking at the hashtags – influencers often reference #Ad at the bottom of a post.

“Don’t let your favourite social media stars influence you to the point where it’s negatively impacting your bank balance. Recognise exactly what you are able to afford, be selective with your purchasing decisions and be clever about customising what you already have.”

My Frugal Year’s tips on how to stay on track when paying off debt

There are things you do can to get back on top of your money (Image: Getty)

“Like the start of any challenge, when you start paying off debt you’ll feel a surge of determination and energy at the start, which is brilliant,” she explains.

“However, paying off your debt is a journey and isn’t done overnight – believe me when I say there will be times where your motivation will be tested. There will be ups and downs but ultimately, the key is keeping yourself on track.”

For those tricky and testing times, here are my tips for staying on course without losing your mind:

    1. Be realistic about your budget

    So you’ve done the sums – income vs outgoings – and now it’s time to set yourself a budget and allocate the rest of your income to debt repayments.

    It can be tempting to strip your budget down to the barest essentials which will, of course, mean that you can pay off your debt quicker. But if you deprive yourself completely of any luxuries then you’re more likely to give up.

    Focus on getting into the budgeting habit first, rather than trying to give up everything at once, otherwise you risk derailing the process. It’s okay to allow space, where possible, for a couple of things you enjoy in your monthly budget.

      2. Give yourself time to learn

      Living within your means is a skill and if you’ve been overspending for a while it will take a while to figure out what works for you. Allowing yourself time to learn how to cut costs, from effective meal planning to working out your spending triggers, is key to a sustainable budget.

      Keeping a close eye on your credit report is also a great habit to get into.

      When you check your credit report you get a snapshot of all your outstanding credit, such as mobile phone and energy bills, as well as credit cards, loans and mortgages, so you can see how much you owe and where any problems might arise.

        3. Look after yourself on social media

        While it’s unrealistic to cut social media out completely, you can change the way you use it.

        If there are certain accounts that trigger your spending, it’s worth unfollowing or muting them while you adjust to your new lifestyle. Remember that Instagram is only a snapshot of people’s lives, especially those who use it professionally.

        If you find yourself feeling inadequate, or lamenting the fact that you can’t afford an insta-perfect holiday this year, try to take some time away from social and do something else that you enjoy, offline.

          4. Small goals: big plans

          As someone who started with over £25,000 of credit card debt, the idea of being debt free and saving for a house deposit felt too far off to motivate me.

          So I started by setting smaller, more achievable goals – to be at under £20,000 by Christmas, for example – which has deterred me from many an impulse purchase.

          Slowly but surely, those bigger goals that seemed like pipe dreams won’t seem so far off! And more importantly, remember to celebrate the small wins because every win counts.

‘We will drive financial inclusion with technology’

While speaking on how the bank intended to woo the unbanked Nigerians in the next few years, Alabi said it planned to deploy financial technology to …

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The Manager of the Idumota Branch of SunTrust Bank, Olajumoke Alabi, says the bank is committed to driving financial inclusion with technology in order to give more Nigerians access to financial services.

This, she said, was in line with the directives of the Central Bank of Nigeria.

She said the bank would focus on the micro, small and medium enterprises to help them grow their business because of their relevance to the economy.

Alabi, who noted that the country was blessed with large market of entrepreneurs, gave the assurance that the bank was prepared to explore it to develop the economy.

In a statement, she spoke during the opening of the bank’s branch at Idumota in Lagos.

She said, “The SME market is a large one that no single financial institution can fully exhaust. But what SunTrust is doing that is different from other commercial banks is that we go to the smallest of the customers out there even to the informal traders.

“We extend our services to them in order to help them grow their businesses.

“We also offer them temporary overdraft with highly competitive interest rates compared to others. Consequently, that has endeared us to our customers and the market. The SMEs you have in this area are informal in nature.”

While speaking on how the bank intended to woo the unbanked Nigerians in the next few years, Alabi said it planned to deploy financial technology to achieve the goal of bringing the unbanked rural dwellers.

“Today, we still have a lot of unbanked Nigerians, and the problem usually is going into the banking hall. When you have bank in rural areas, prospective customers may not have the interest of going there. But what SunTrust wants to do is to deploy cutting-edge financial technology to achieve this.

“Today, a lot of people have access to cell phone, with our code, prospective customers can open an account without coming to the bank’s main building or see anybody physically.”

She added that the bank was using technology to drive financial inclusion.

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