To play PvP, you both must have at least one level 4 mercenary. You can still play PvE together tho. To do so, one of you should create a quest mission (first check if it is playable by two or more players, because there are some missions that are solo) or a basic farm mission, the other player has to join the matchmaking by entering the yellow rhombus that is generated once a player has created a battle.
Three steps for that are:
1. Get to the global map and go to an NPC faction that you want to farm.
2. On the left side of the screen, choose to create either the quest you took from Jack or a regular battle and click continue in the popped up match details window.
3. Call your friend to join you through the yellow rhombus.
You also should join a group by an invitation from one to another, this way you will both share the loot, by a loot share system that was set by the party leader.