Exclusive: Lynk raises $3M to lower transaction fees
Lynk, a startup that helps merchants create customer loyalty programs and reduce transaction fees, has raised $3 million in seed funding from investors that include Samsung Next, Plug and Play, Tribe Capital, Simplex Trading, and N49P, the company tells Axios.
Why it matters: Merchants are always looking for ways to lower transaction fees, and Lynk’s platform does just that.
How it works: Lynk built a closed-loop payments platform that enables companies to collect payments and launch loyalty programs, while skirting high credit card processing fees.
- Through the platform, Lynk enables merchants to have users pre-fund accounts through ACH or wire transfers.
- Merchants can also provide loyalty rewards to incentivize end customers to do so.
- Lynk founder and CEO Nabi Awada compares the experience to the Starbucks wallet: “It's brandless so you can put your own brand around it and accept payments without having a lot of intermediaries in between that increase the cost of processing,” he says.
Between the lines: By transitioning customers to lower-cost ACH transfers, merchants can cut down on credit-card processing fees by as much as 90%, Awada says.
- Traditional card processing fees can range from 2.9%-5% per transaction, while Lynk’s transaction fees typically range from 0.5%-1%.
- “We're also able to see an increase in the average order value of about 48% because we help these businesses embed rewards into the payment stream,” Awada says.