Startup Launches Mobile Banking App Offering 1% Cashback, 2.1% APY, No Fees

Banking services get more competitive as further innovation transfigures the financial sector. Digital currencies may have also played a role in how traditional financial services are shaped up. Making a new entry with an offer that's attractive enough to challenge other startups that have taken on big banks too is startup Level.

Level is a mobile banking app that allows an unlimited 1% cash back on debit card purchases, a 2.1% annual percentage yield (APY) on deposits, which the company says is 35 times higher than the national average, and no fees, TechCrunch reported.

The 1% cashback is a portion of what the merchant pays to process the transaction that instead of Level taking all of it, it shares it instead to customers. It's similar to how Lolli shares Bitcoins to its users.

Another advantage that Level touts is the number of fees customers can do away with, including overdraft fees, maintenance fees, minimum balance fees, foreign transaction fees and add-on ATM fees for using Level. The startup also offers operator fee reimbursement three times a month for any ATM worldwide that accepts Visa.

"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.

The company behind Level is Zero Financial, Inc., which is the same team that introduced the "debit-style" credit card Zero, which is aimed at the millennial population, the same demographic that another banking startup epiFi targets.

Last year, Zero landed $20 million in a Series A funding round from investors led by New Enterprise Associates. And earlier this month, it also banked an extra $100 million in debt financing from Neuberger Berman Group.

What Zero looks to do with Level is to fill the gaps of other startups' app, which fail to compel customers to switch from traditional banking.

Galen said, "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."