Lynk, a startup that helps merchants create customer loyalty programs and reduce transaction fees, has raised $3 million in seed funding, the company tells Ryan.

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 fees for processing credit cards.

• 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% to 5% per transaction, while Lynk’s transaction fees typically range from 0.5% to 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.

Of note: The seed round investor list includes Samsung Next, Plug and Play, Tribe Capital, Simplex Trading, and N49P.