First Trade Union Bank has unveiled FT Pay, a mobile payment and loyalty app powered by LevelUp. The relationship represents LevelUp's first foray into the traditional banking industry with a technology it has typically sold under its own brand.
"Once this gets rolled out and proves to be successful LevelUp will have established a kind of foothold in the financial services industry," says Mike Butler, president and CEO of First Trade. The companies announced their relationship last year, and they announced the availability of the app today.
LevelUp, a product of Cambridge, Mass.-based SCVNGR, allows users to link a bank card to a mobile app to make payments at the point of sale. The app generates a unique QR code which merchants can scan at the point of sale to accept a payment from the linked account.
"Given the community banking industry isn't known for being a hotbed of tech innovation, we were more than game to team up with First Trade to build a mobile payments app powered by LevelUp," says Christina Dorobek, head of POS partnerships at LevelUp.
First Trade "is committed to providing their customers with a technology experience that rivals big-name banks and with the personalized attention that community banks are known for," she says. "We love helping companies disrupt their industry."
First Trade plans to measure the app's success by the number of customers downloading FT Pay and by how many new customers the product attracts to the bank. It tested the app for more than six months with about 50 people from the First Trade community, including employees and tech-savvy customers, says Butler.
"LevelUp was providing an app for a financial service company versus their standard retail company so we had a couple other requirements; we are pretty particular about the customer service and ease of use part of it," Butler says.
First Trade wanted to make sure the backend process of the First Trade loyalty program the bank created for the launch "ran as smoothly as LevelUp's," he says.
Introducing its white-label app to traditional financial institutions, LevelUp looked to gain millions of new users of its mobile payment method.
LevelUp uses QR codes at the point of sale, and in September it added acceptance for Near Field Communication wireless technology, as Apple was rumored to be embedding NFC into the iPhone 5.
LevelUp is indifferent about what technology it's using, and thus can provide a payment system that works for any customer, Butler says.
Customers with FT Pay can use their smartphone to pay at any of LevelUp's 5,000 merchant partner locations, also unlocking LevelUp rewards and earning offers from First Trade.
For new customers, Boston-based First Trade will offer matching savings at merchant locations and deposit up to $25 directly into newly opened checking accounts as a bonus to new users. For existing customers, First Trade allows all or a percentage of merchant credits they've earned through LevelUp to go into their savings account. The bank will match, up to $25, the funds users save.
"The whole concept was very well received," Butler says.
The free app, available for iPhones and Android devices, draws funds from a First Trade debit card and any other linked debit or credit card.
While the big banks have experimented with their own mobile payment products, others have decided to partner with startups and tech companies. And kindling relationships with these companies doesn't go against the mindset that banks are the natural home for a mobile wallet because of their existing relationships with merchants and consumers.
Paying with a phone isn't a big step away from accessing a bank account from a smartphone, Dorobek says. "Consumers pay with money from their bank accounts and carry their phones everywhere, so to us, it makes sense that banks and mobile payments work together."
LevelUp sees proprietary merchant apps as beneficial too. In February, LevelUp created a white-label app for organic salad shop, sweetgreen. Since the app launched, one in five customers has used the rewards app.