NEW YORK (Reuters) - Cogni Inc, a New York-based digital banking start-up that wants to hold deposits for consumers and book their hotels, flights and movie tickets, recently closed a $1.7 million seed funding round as it prepares to launch.

The two-year old company, which is 2 percent owned by Barclays Plc, has also hired a boutique merchant bank to advise its Series A funding, which is typically the first significant round of venture capital financing.

Cogni plans to operate on a borrowed charter and has no plans to apply for an independent charter, Chief Executive Officer Archie Ravishankar told Reuters, who disclosed the seed funding. The decision could show that the company sees itself as more of a technology company than a banking company.

Many fintech companies are hesitant to apply for the charter because none have been awarded yet and no one wants to be the test subject.

“We are not innovating a lot within the financial services space but we are innovating a lot in the lifestyle space,” he said in an interview.

While traditional banks make money by collecting cash from depositors and lending it out at a higher rate to borrowers, Cogni will derive a significant amount of revenue from partnerships with companies that are offering products and services to its customers.

Brands are attracted to Cogni because traditional advertising has not been effective with younger consumers who are constantly bombarded with marketing, Ravishankar said.

Though not yet common in the United States, Cogni’s single payment and commerce platform where you make purchases on the same app where you manage your cash is popular outside the United States with such apps as WeChat.

“There is a huge benefit for the merchants,” he said.

The MyCogni app has been tested with a few hundred users in the United States or the past two months. It offers a debit card with up to 12 percent cash back on purchases at over 160,000 retailers and allows customers, such as a freelancer, to send invoices, and divide up their cash into personalized payment and savings buckets.

Ravishankar says about 30,000 people have expressed interest in signing up for the early 2019 launch.

The Cogni stake is the latest in Barclay’ investments in U.S. fintech companies as it expand in the market. The European bank has been paying highly competitive rates for deposits on U.S. savings accounts and recently started offering personal loans.

Earlier this year, Barclays announced a partnership with PayPal Holdings Inc to gain market share in the $1.8 trillion global payments industry, where Amazon.com Inc and Apple Inc are quickly picking up steam.