Access to earned wages boosts productivity

In a time of pandemic-induced financial and economic hardship, waiting to get paid once a month can be difficult in the face of emergencies, surprise medical bills, and unforeseen expenses.

The inability to access earned wages during tough times can also increase the chances of employees resorting to payday loans at high interest rates, further compounding their dire financial situation.

In Spain, salary advance startup Payflow sought to solve this problem for workers by allowing them to access their earned wages “when they want, as many times as they want and receive”. [funds] instantly,” co-founder Avinash Sukhwani told PYMNTS.

“Millions of Spaniards live hand to mouth and only get paid once a month. In an increasingly immediate world, this cannot be a reality,” Sukhwani said, adding that allowing workers instant access to their earned wages several times a month eliminates financial stress, leading to greater productivity for business.

Compared to other companies in the on-demand payment industry, Sukhwani said Payflow, which launched in 2020, sells its product to businesses for a monthly fee with no direct employee charges for the service.

“The workers’ statute recognizes access to wages as a right. It would not be good for the workers to be charged for their rights,” he explained. “They [companies] offer Payflow as a benefit to their employees.

Read more: Barcelona-based Payflow closes $9.1m funding round

And in sectors like hospitality, for example, where companies face major challenges in both recruiting and retaining talent, being able to offer such a free service for staff that improves well-being employee finance is extremely valuable.

“We noticed that our customers [have been able to] hire 27% faster, reduce their turnover by 20% and increase the productivity of their employees by 10% since [using] Payment flow. Happy employees make for happy companies, and our product helps increase employee satisfaction,” he said.

Reach millions of employees

So far, the model has gained popularity among blue-collar workers, who are the most adopted by companies using the platforms.

“In just two years, Payflow has become the regional leader in the earning industry with [more than] 100,000 users and [over] 175 customers, including well-known brands such as Webhelp, Covirán, Aristocrazy and Grosso Napoletano,” Sukhwani said.

The company recently closed a $9.1 million Series A funding round that increased its total funding to nearly $14 million, and with 0% churn and never losing a customer. , Payflow’s point of differentiation is operating in what is proving to be an increasingly competitive space, he noted.

Going forward, the Spanish FinTech plans to grow from a payday advance business to a neobank, growing from more than 100,000 current users to millions of employees in Europe and Latin America.

“In order to achieve this goal, we should significantly expand the user base and launch features that allow employees to do more with their money,” he said, aware of the enormous challenges involved in an ambitious plan. like building a digital bank.

“Many have tried and failed because it is a very complex product to build from all points of view, including financial, operational [and] regulations,” he noted.

But after the success Payflow has enjoyed over the past two years, Sukhwani said the company is not slowing down anytime soon and staying focused on its goals and objectives.

“In 2022, we want to double the workforce and launch two additional products. We plan to continue our international expansion through Latin America and Southern Europe, [starting in Italy and Portugal],” he said.

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NEW PYMNTS DATA: ACCOUNT OPENING AND LOAN SERVICE IN THE DIGITAL ENVIRONMENT

On: Forty-two percent of US consumers are more likely to open accounts with financial institutions that facilitate automatic sharing of their bank details upon sign-up. The PYMNTS study Account opening and loan management in the digital environmentsurveyed 2,300 consumers to explore how FIs can leverage open banking to engage customers and create a better account opening experience.

Joseph E. Golightly