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PayActiv

From EverybodyWiki Bios & Wiki


PayActiv
Private, Benefit corporation
ISIN🆔
IndustryFinancial Technology, Financial Services
Founded 📆2012; 13 years ago (2012)
Founders 👔
  • Safwan Shah
  • (CEO)
  • Sohail Aslam
  • (CTO)
  • Ijaz Anwar
  • (COO)
Headquarters 🏙️,
San Jose, California, U.S.
,
U.S.
Area served 🗺️
Key people
  • Safwan Shah
  • (Co-Founder & CEO)
  • Sohail Aslam
  • (Co-Founder & CTO)
  • Ijaz Anwar
  • (Co-Founder & COO)
Members
Number of employees
🌐 WebsitePayactiv.com
📇 Address
📞 telephone

PayActiv is a financial technology company based in San Jose, California.[1] PayActiv delivers financial services and earned wage access to unbanked, underbanked and those living paycheck to paycheck. It provides on-demand, real-time access to earned wages to reduce or eliminate timing related penalties and unnecessary fees, like bank overdrafts, late fees, payday loans and other expensive alternative financial services.[2]

The solution is offered as a financial wellness service by employers to their employees, and PayActiv works with nearly 1,000 businesses,[3] including Walmart.[4] Through its mobile app, PayActiv gives users access to their earned yet unpaid wages. Users can transfer funds to their bank account, pay bills electronically, access cash[5] gain discounts at retailer, hail an Uber or pay for Amazon purchases.[3]

Along with earned wage access, PayActiv’s financial platform provides a holistic financial wellness solution to its users. They can allocate and save from their yet to be paid wages using the built-in savings tool, learn the benefits of saving small amounts of wages over-time, receive guidance from a financial health counselor, and find pharmacy discounts, all from their mobile phone. Businesses that use PayActiv see a reduction in turnover.[6]

History[edit]

2012–2018[edit]

PayActiv was co-founded by CEO Safwan Shah, CTO Sohail Aslam and COO Ijaz Anwar in 2012 as a solution to the financial stress faced by millions of Americans who are living paycheck-to-paycheck. In October 2013, PayActiv was adopted by its first customer Jersey Precast Concrete.[7] In June 2014 PayActiv raised $4.3M in funding.[8] In 2015, PayActiv shared a demo at Finovate.[9] On February 19, 2016, PayActiv announced Series A equity funding of $9.2M led by Softbank Capital.[10] On December 13, 2017, Walmart, the largest private employer in the world, announced financial wellness services powered by PayActiv earned wage access for their 1.4 million associates.[4] In May 2018, a Harvard Kennedy School working paper based on data from 16 PayActiv customers is published showing how PayActiv earned wage access lowers employee turnover by 19% and saves employees $30 on average by avoiding bank overdraft charges or a late payment.[11] In July 2018 PayActiv joined the ADP Marketplace, giving ADP’s customers access to earned wage access through PayActiv.[12][13] In September 2018, PayActiv announced Series B financing of $20 million from Generation Partners.[14]

2019–present[edit]

Throughout 2019, PayActiv advocated for earned wage access for paycheck-to-paycheck workers starting with the sponsorship of legislation in California to regulate the growing earned wage access industry.[15] In June, the company released its documentary, It’s About Time looking at pay timing and its correlation with financial stress experienced by millions of working Americans. The film follows the stories of several working Americans living paycheck-to-paycheck. It also features commentary from CEOs, academic researchers, financial health experts and employees.[16][17][18]

In September 2019, PayActiv announced that it had become a Public-benefit corporation, marking its commitment to produce a public benefit and operate in a responsible and sustainable manner. Raj Sisodia, co-founder and co-chairman of the Conscious Capitalism movement also joined PayActiv’s advisory board.[19] Sisodia’s 2019 book, The Healing Organization: Awakening the Conscience of Business to Help Save the World included a chapter featuring PayActiv’s business model.[20] [21][19] In 2019, PayActiv also announced partnerships with Visa and Fiserv to better deliver services to users.[22][23]

Financial Stress and Earned Wage Access[edit]

Co-founder and CEO Safwan Shah often discusses his mission to help alleviate financial stress through earned wage access.[24] An estimated 78% of Americans live paycheck to paycheck and most Americans can’t afford a $400 emergency.[25][26] The Financial Health Network estimates that consumers spent $173 billion in fees and interest in 2016 alone, and that includes $24.5 billion in bank overdraft fees and $6 billion in payday loans. In addition, there are more payday lenders than McDonald’s restaurants in the United States.[27][28] PayActiv helps alleviate financial stress and suffering by allowing users to access their earned, but unpaid wages before payday, allowing 31% of users to avoid overdraft fees; 38% to avoid overdraft fees, 22% to avoid payday loans and another 9% to avoid other loans.[2][29]

Business Model[edit]

Overview[edit]

PayActiv is offered by businesses to their employees as a voluntary financial wellness benefit. PayActiv fronts the accessed funds and all employees are eligible from day one irrespective of their employment status (part time/full time/exempt/non-exempt), banking status, FICO score or credit history because PayActiv is not a credit solution and there is no underwriting involved. A typical user pays a flat $5 membership fee per two-week pay period, only if they use the PayActiv benefit, and many companies, including Walmart cover a portion or all of the fee.[30]

Recognition[edit]

On May 13, 2016, PayActiv was awarded the Best of FinTech Show at Finovate.[31] On September 19, 2016, HR Executive awarded PayActiv the Top HR Product of 2016 award.[32]

References[edit]

  1. ↑ Cowley, Stacy (July 4, 2016). "New Payday Options for Making Ends Meet". The New York Times. The New York Times Company. Retrieved December 30, 2019.
  2. ↑ 2.0 2.1 Tergesen, Anne (September 2, 2019). "Some Companies Offer a New Benefit: Payroll Advances and Loans". WSJ. Retrieved December 31, 2019.
  3. ↑ 3.0 3.1 Lesonsky, Rieva (December 9, 2019). "Where to Get Ideas, Small Businesses are Optimistic, 5 Marketing Tools You Might be Overlooking and Other Things Entrepreneurs Need to Know". SmallBizDaily. Retrieved December 31, 2019.
  4. ↑ 4.0 4.1 Canney, Jacqui (December 13, 2017). "Wellness Services for Associates Nationwide". Walmart.com. Retrieved December 31, 2019.
  5. ↑ "PayActiv And Walmart Team Up To Provide Workers With Access To Wages". PYMNTS. October 25, 2018. Retrieved December 31, 2019.
  6. ↑ Groenfeldt, Tom (April 18, 2019). "Early Access To Wages, A Prized Benefit, Costs Employers Little Or Nothing". Forbes. Retrieved December 31, 2019.
  7. ↑ Stevens, Larry (November 1, 2016). "Help in Advance". HumanResourceExecutive.com. Retrieved December 31, 2019.
  8. ↑ Blattberg, Eric (June 26, 2014). "Funding Daily: Big-money Thursday". VentureBeat. Retrieved December 31, 2019.
  9. ↑ "FinovateSpring 2015 / PayActiv Presenter Profile". Finovate. March 1, 2015. Retrieved December 31, 2019.
  10. ↑ "PayActiv Section Overview". Crunchbase. February 19, 2016. Retrieved December 31, 2019.
  11. ↑ Baker, Todd; Kumar, Snigdha (May 1, 2018). "M-RCBG Associate Working Paper No. 88". Harvard.edu. Retrieved December 31, 2019.
  12. ↑ "ADP Links Clients To PayActiv Early Wage-Access Capabilities". PYMNTS. July 26, 2018. Retrieved December 31, 2019.
  13. ↑ Kore, James Rufus (August 5, 2018). "Need a loan? Forget the corner payday lender — your boss has you covered". Los Angeles Times. Retrieved December 31, 2019.
  14. ↑ Hurst, Samantha (October 10, 2018). "Fintech Startup PayActiv Secure $20 Million Through Series B Financing Round Led By Generation Partners". CrowdFundInsider. Retrieved December 31, 2019.
  15. ↑ Hayashi, Yuka (September 2, 2019). "Pay-Access Apps Face Regulatory Test". WSJ. Retrieved December 31, 2019.
  16. ↑ Blake, Corey; Durlach, Darren (June 1, 2019). "It's About Time: The Film". Retrieved December 31, 2019.
  17. ↑ Forcade, Katie (July 10, 2019). "IBEX Global featured in documentary". WVNSTV. Retrieved December 31, 2019.
  18. ↑ Saunders, Anna (July 10, 2019). "Beckley Native Featured In Documentary About Earned Wage Access". WOAY.tv. Retrieved December 31, 2019.
  19. ↑ 19.0 19.1 Marwitz, C.J. (September 19, 2019). "Benefits industry newsmakers: PayActiv, Collective Health, Bluecrew, Maestro Health, HERO". BenefitsPro. Retrieved December 31, 2019.
  20. ↑ Sisodia, Raj; Gelb, Michael J. (September 19, 2019). The Healing Organization: Awakening the Conscience of Business to Help Save the World. p. 101. Retrieved December 31, 2019. Search this book on
  21. ↑ Hurst, Samantha (September 18, 2019). "U.S. Fintech PayActiv Becomes Public Benefit Corporation". CrowdFundInsider. Retrieved December 31, 2019.
  22. ↑ Isidore, Chris (March 9, 2019). "Visa and PayActiv are now providing quicker pay for those who need it most". CNN. WarnerMedia. Retrieved December 31, 2019.
  23. ↑ "PayActiv Deploys Fiserv Tech To Move Employee Wages". PYMNTS. August 30, 2019. Retrieved December 31, 2019.
  24. ↑ Shah, Safwan (August 12, 2019). "The startup with a social mission of solving the payday loan problem". Mixergy. Retrieved December 31, 2019.
  25. ↑ Youn, Soo (May 24, 2019). "40% of Americans don't have $400 in the bank for emergency expenses: Federal Reserve". ABC News. Retrieved December 31, 2019.
  26. ↑ Martin, Emmie (January 9, 2019). "The government shutdown spotlights a bigger issue: 78% of US workers live paycheck to paycheck". CNBC. NBCUniversal. Retrieved December 31, 2019.
  27. ↑ Wilson, Eric (December 7, 2017). "2017 Financially Underserved Market Size Study". FinHealthNetwork. Retrieved December 31, 2019.
  28. ↑ Bennett, Jeannette N. (April 1, 2019). "Fast Cash and Payday Loans". St.LouisFed. Retrieved December 31, 2019.
  29. ↑ Baker, Todd H.; Kumar, Snigdha (May 13, 2018). "A Better Alternative to Payday Loans". WSJ. Retrieved December 31, 2019.
  30. ↑ Kim, Jed (July 6, 2016). "How to access your hard-earned money before payday". Marketplace. Retrieved December 31, 2019.
  31. ↑ Penn, David (May 12, 2016). "FinovateSpring 2016 Best of Show Winners Announced". Finovate. Retrieved December 31, 2019.
  32. ↑ "Human Resource Executive® Announces Winners of Top HR Products of 2016 Awards". HRTechnologyConference. October 5, 2016. Retrieved December 31, 2019.

External links[edit]


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