FinTechs are playing a big part in getting much-needed funds to US consumers and businesses who are suffering as a result of COVID-19.
A whopping 6.6 million Americans filed for unemployment last week, as businesses are shutting down or laying off staff due to the global pandemic. FinTech is now working with both companies and nonprofits to get money into people’s hands quicker.
New York-based nonprofit GiveDirectly, for example, partnered with Brooklyn Fintech Propel, whose app has more than 2 million low-income users, to find those who have been hardest hit economically by the coronavirus. GiveDirectly is then donating $1,000 to these Americans in New York, the San Francisco Bay Area, Seattle and New Orleans.
California FinTech startup Even, with an app that helps people budget and access earned wages early, works with companies including Walmart, which usually splits the cost of Even’s user fees with their employees. The retail giant recently started covering the entire fee due to the coronavirus, with more than 500,000 Walmart employees logging into Even each month. And Even CEO Jon Schlossberg has ordered his engineers to now focus on getting users faster access to their earned wages.
San Francisco digital bank Chime is also offering $1,200 in paycheck advances to 1,000 of its users while they wait for their government stimulus checks.
The FinTech sector is also finding ways to get small businesses much-needed funds faster. Online lender Kabbage started a program that lets consumers buy gift certificates from restaurants, while SaverLife recently teamed up with Wells Fargo and financial coaching service Neighborhood Trust to provide $1 million in financial aid and advice to small businesses.
In addition, FinTechs want to help the federal government deploy relief funds to small businesses throughout the country in a faster, more efficient way.
Online lenders including Kabbage, Funding Circle and OnDeck, along with additional FinTechs such Plaid, Stripe and FIS, are in discussions with the White House, National Economic Council, Treasury Department and Small Business Administration to help distribute $349 billion of emergency capital to SMBs, as part of the CARES (Coronavirus Aid, Relief, and Economic Security) Act.