Company:PayActiv
| Type | Private |
|---|---|
| Industry | |
| Founded | 2012 |
| Founder | |
| Headquarters | San Jose, California, U.S.A. |
| Services | Earned wage access |
Number of employees | 200 (2020) |
PayActiv is a financial services company headquartered in San Jose, California. PayActiv partners with companies to provide employees with financial services such as earned wage access.[1]
Services
To receive earned but yet unpaid wages in the current pay period, employees can select from free options or pay an optional $2.99 fee.[2] The company links with payroll providers such as ADP, Paychex, and Paycor to provide early access wages to employees.[3][4] The service is mostly used by companies with lower income employees who work to paycheck-to-paycheck.[5]
Earned wage access is viewed as a responsible alternative to payday lending, as the service is offered without recourse, credit impacts, interest, or late fees.[6]
History
PayActiv was founded in 2012 by Safwan Shah, Sohail Aslam, and Ijaz Anwar.[7] In 2014, the company raised $4.3 million in funding.[8]
In 2017, Walmart introduced salary advances through PayActiv. As of 2019, an estimated 380,000 of Walmart's 1.4 million employees used the app regularly.[9]
In 2019, the company processed $2.5 billion in early wage payments.[10] That year, the company announced a partnership with Visa that would allow users to receive and spend paycheck advances through a prepaid Visa card.[11][12]
In 2019, PayActiv sponsored California Senate Bill 472, which would create a regulatory framework for earned wage access (EWA) providers in California.[13] The bill limited the transaction fees and the number of transactions that EWA programs could provide.[14]
PayActiv partnered with OnShift in March 2020 to provide early wage access to workers in healthcare and rehabilitation facilities during the COVID-19 pandemic.[15] In August, 2020 PayActiv raised $100 million in Series C funding, led by Eldridge Industries.[16]
In December 2020, the Consumer Financial Protection Bureau (CFPB) granted PayActiv sandbox approval to provide EWA. The CFPB ruled that Payactiv was not a traditional lender since its EWA program did not create debt, and as such was exempt from the Truth in Lending Act.[17]
As of 2021, the company had partnered with 1,500 employers, including Walmart, Wendy's, and Pizza Hut.[18][19]
References
- ↑ Balogh, Shannen (January 24, 2020). "These 5 paycheck-advance startups have attracted a big wave of VC funding. Here's a rundown of the fees they're charging to break you out of the 2-week pay cycle.". https://www.businessinsider.com/startups-are-rethinking-the-2-week-pay-cycle-by-giving-users-access-to-earned-wages-2020-1.
- ↑ "Payactiv Program Pricing". 1 September 2023. https://www.payactiv.com/program-pricing/.
- ↑ Kumar, Todd H. Baker and Snigdha (2018-05-13). "A Better Alternative to Payday Loans" (in en-US). Wall Street Journal. ISSN 0099-9660. https://www.wsj.com/articles/a-better-alternative-to-payday-loans-1526233530.
- ↑ "PayActiv joins ADP as it takes on payday lenders" (in en). 2018-08-08. https://www.paymentssource.com/news/payactiv-joins-adp-to-offer-payday-lending-alternative.
- ↑ "Do paycheck advance apps improve financial health?" (in en). 2019-03-11. https://www.americanbanker.com/news/do-paycheck-advance-apps-improve-financial-health.
- ↑ "Home" (in en). https://www.earnedwageaccess.info/.
- ↑ "A Pakistani-American entrepreneur raised $100 million for his Fintech startup 'PayActiv.'" (in en-US). 2020-08-20. https://www.techjuice.pk/a-pakistani-american-entrepreneur-raised-100-million-for-his-fintech-startup-payactiv/.
- ↑ Blattberg, Eric (2014-06-26). "Funding Daily: Big-money Thursday" (in en-US). https://venturebeat.com/2014/06/26/funding-daily-big-money-thursday/.
- ↑ Tergesen, Anne (2019-09-02). "Some Companies Offer a New Benefit: Payroll Advances and Loans" (in en-US). Wall Street Journal. ISSN 0099-9660. https://www.wsj.com/articles/some-companies-offer-a-new-benefit-payroll-advances-and-loans-11567416601.
- ↑ Crossman, Penny (2020-03-20). "Consumers seek early access to wages to soften coronavirus hit" (in en). https://www.americanbanker.com/news/consumers-seek-early-access-to-wages-to-soften-coronavirus-hit.
- ↑ Isidore, Chris (2019-03-09). "Visa and PayActiv are now providing quicker pay for those who need it most - CNN Business" (in en). https://www.cnn.com/2019/03/09/business/visa-pay-advances/index.html.
- ↑ Crossman, Penny (2019-03-11). "Do paycheck advance apps improve financial health?" (in en). https://www.americanbanker.com/news/do-paycheck-advance-apps-improve-financial-health.
- ↑ "The derailment of California's payroll advance law" (in en). 2019-09-20. https://www.americanbanker.com/news/the-derailment-of-californias-payroll-advance-law.
- ↑ Opfer, Chris (August 1, 2019). "'Early Wage' Apps Aim to Disrupt Payday Loans, Two-Week Cycle" (in en). https://news.bloomberglaw.com/daily-labor-report/early-wage-apps-aim-to-disrupt-payday-loans-two-week-cycle.
- ↑ Vanac, Mary (March 3, 2021). "OnShift innovations enable workers access to wages before payday". https://www.bizjournals.com/cleveland/news/2021/03/03/onshift-enables-workers-to-access-wages.html.
- ↑ Shen, Lucinda (August 17, 2020). "SoftBank lends WeWork $1.1 billion" (in en). https://fortune.com/2020/08/17/softbank-lends-wework-1-1-billion/.
- ↑ Crossman, Penny (2020-12-30). "Synchrony, PayActiv join CFPB's compliance sandbox" (in en). https://www.americanbanker.com/news/synchrony-payactiv-join-cfpbs-compliance-sandbox.
- ↑ Paoletta, Kyle; Nwanevu, Osita; Tharoor, Kanishk; Robins, James; Simons, Seth (2021-03-01). "The FinTech Industry Wants to Give Desperate Workers an Advance on Their Next Paycheck. It's a Trap.". The New Republic. ISSN 0028-6583. https://newrepublic.com/article/161488/fintech-industry-wants-give-desperate-workers-advance-next-paycheck-its-trap. Retrieved 2021-04-07.
- ↑ "U.S. Hourly Workers Push to Get Paid Sooner" (in en). Bloomberg.com. 2020-04-01. https://www.bloomberg.com/news/articles/2020-04-01/u-s-hourly-workers-pressured-by-crisis-push-to-get-paid-sooner.
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