Americans have faced unprecedented financial stress as COVID-19 continues to disrupt workers’ cash flow. In a PayActiv study conducted during this crisis, 82% of workers reported that they were more worried about their financial problems than their health. Furthermore, 58% of workers shared that their expenses have increased during the pandemic. For the financially strained who are still employed, an easy way to access and manage earned wages comes as a relief.
PayActiv has been leading the charge of earned wage access platforms. Their mission is to bring ‘security, dignity and savings to workers through an award winning holistic financial wellness platform that gives employees on-demand access to earned but unpaid wages.’ Research conducted by PayActiv found that the average American worker can save up to $250 each month by utilizing earned wages and saving on fees associated with alternative financing. Workers aren’t the only ones to benefit from on-demand access to their earned wages. The aforementioned study also found a reduced workforce turnover rate between 25-31% when implementing PayActiv for their payment services.
According to a statement from Safwan Shah, CEO and Co-Founder of PayActiv, “the timing gap between work and wages is the main reason workers get hit with punitive late fees, overdraft fees and other penalties. Cumulatively, these fees reduce wages by seven percent every month. The PayActiv platform is the only system where everyone wins: employers lift worker morale with little to no cost and huge dividends; employees get wages when they actually need them most; and cash re-enters the economy faster, making communities financially healthier."
2020 has seen over 1000 businesses and around 4 million employees benefit from this payroll innovation, which has stimulated the strained U.S. economy by elevating the velocity of money. With big plans to expand, PayActiv raised $100 million of funding, announced last week. Led by Eldridge, the Series C financing round will enable the platform to further its mission, expand its customer base, and increase its services which will include structuring an expandable variable funding facility (“VF Facility”) with Security Benefit, the leading retirement solutions provider.
No doubt the potent pairing of growth equity and VF Facility financing will provide PayActiv with the resources required to continue its impressive growth trajectory.