Boston’s First Trade Union Bank will soon become one of the few banks to offer its customers a mobile app for making purchases with smartphones.
The small community bank, which has two branches in Boston and two in New York, will launch the app early next year through a partnership with Scvngr Inc., a Boston start-up that operates the LevelUp mobile payments platform. The bank’s app will let its customers use their iPhone or Android phone to pay at any of the 4,000 merchants nationwide that are on LevelUp’s network.
While several other large banks such as Bank of America and Barclays are testing mobile wallet technologies in select regional markets, First Trade Union Bank could be the first to market with a mobile payment app for all of its customers.
“We think we’re the first bank that’s going to take this to a broader level,” said Mike Butler, president of First Trade Union Bank, who acknowledge his bank can’t compete with the likes of Bank of America when it comes to the number of branches. However, he said, “we do feel like we can compete in the technology space.”
The growth of mobile payment technology is being fueled by companies such as Scvngr, San Francisco’s Square Inc., and Paydiant Inc., which is based in Wellesley and is working with Bank of America and Barclays.
Last month, Starbucks Corp. began accepting mobile payments using Square at 7,000 locations. The coffee chain also has its own mobile phone app that customer can use to buy coffee.
But with banks such as First Trade Union and financial giants such as Bank of America beginning to adopt mobile wallets, the technology may begin to gain mass appeal, said Seth Priebatsch, Scvngr’s chief executive officer.
“It will help a lot of mainstream consumers get over some of the anxiety they feel about mobile payments,” he said. “It’s starting to feel to consumers like this is a very real thing.”
The First Trade Union Bank app will be available in the first quarter of 2013 and will also include several other mobile banking options such as using your phone to find the nearest ATM.