In today’s episode, we’re celebrating Payactiv’s second year in a row winning “Best for the World” with Payactiv CEO, Safwan Shah. This award is only given to the top 5% of B Corporations, and it’s a huge deal! So grab some headphones, get comfy, and get ready to learn more about Payactiv’s mission directly from the founder of Payactiv himself.

Eric:

Hello, everyone. Welcome to the Payactiv podcast. My name’s Eric Rosenberg, your host. As always, it’s important to note before we dive in that this show is for education purposes only and I’m not a financial advisor. However, I do have a long background working with finance and I’m excited to have today’s guest. We’ll dive in, in just a moment. 

All right, everybody. Hello. Welcome to the Payactiv podcast. As always, I am your host, Eric Rosenberg and I am thrilled to have today’s guest. He’s a very exciting person, especially here in the Payactiv family because we wouldn’t be here without him. That’s Safwan Shah, the CEO and founder of Payactiv. 

I was really lucky to get to meet him in person a few years ago at a conference in LA. And we’ve been working together in the years since. And we’re happy to have you here on the show, we’re excited to learn a little bit about you and what you think is going to happen in the future of Payactiv. So Safwan, welcome to the show.

Safwan:

Thank you, Eric. Thank you for inviting me.

Eric:

So before we dive into the details and talk about money and fun stuff like that, let’s talk a little bit about you. So what are a couple of things that we wouldn’t know about you that the people around the office have not heard about Safwan Shah? What would you tell us?

Safwan:

Things that people wouldn’t know and I would still admit, well, I’m a sci-fi geek. I spent a few years designing experiments that have flown in the US Space Shuttle Program. So I guess there are two things.

Eric:

Oh, that’s great. I’m also a big sci-fi fan. We’re both Star Trek fans. I’m always a fan of how they look at the economy in the future in a way that everybody has their basic needs met. Everybody can eat, everybody has an education, everyone has healthcare and if they want to work hard on top of that, that’s their opportunity. That’s a cool thing in that universe.

Safwan:

Yep.

Eric:

Speaking of economies and people supporting themselves, I know Payactiv was right at the frontier, starting the EWA industry, that short for earned wage access for listeners who don’t know that one. So what were you trying to change and fix in the world when you came up with this idea and brought Payactiv together?

Safwan:

Three words, “end needless suffering”. So let me explain. Without timely access to earned wages, there is needless suffering resulting in extreme financial stress and related issues for millions of people. Our business goal, or my business goal, was and is, to alleviate that financial stress and earn wage access or EWA, which is the best and safest way to improve the world.

Eric:

One thing that I love about EWA as someone who has this big background in finance, I’ve seen people go to payday lenders and these other low-credit financial solutions and they end up paying an arm and a leg. And I love how you say that ending financial suffering that’s needless, that’s a great concept and a great idea. And I know that there’s a lot of financial companies out there and a lot of them aren’t so trustworthy. A lot of them are trying to make a quick buck. And that’s something that we’re trying to help here. And I know part of that is, that Payactiv is a certified B corporation. So, could you share a little bit about what that process was like and what a B corporation is?

Safwan:

Yeah. Let me explain what it means. It means that you meet a higher standard of being a company, bottom line is that. It also means that you are a good company versus just being good at marketing. So specifically, to be a B Corp, there were two reasons for us at Payactiv, one, we wanted an external validation and certification of our best practices.

Safwan:

The B organization takes you into a very extensive process, and there is a scoring system, so we were a 105 and 110 in that. So it’s a standardized test, but everyone has a chance to participate and show their capability, and you want to end up as high as you could. So that was the first reason, an external validation. And the second reason, which I think is very important is the company, the founders, I, my team, the people who joined the company had “the B mindset” and it appealed to them. So that’s why we are a B Corp.

Eric:

Yeah. It’s a great company to be in. Companies like Patagonia and Ben & Jerry’s and TOMS and Etsy, that’s a good neighborhood of companies to be in. People are trying to really help the world, not just make money.

Safwan:

Yeah. A thousand plus companies now and it’s global. And I expect that in the years to come it’ll be huge.

Eric:

In that, I know Payactiv was just the recipient of an award so congratulations to the whole team. That’s such a fun thing whenever there’s an award. And this is a really fun one, the Best For The World B Corporation recognition award. Could you share a little bit about what this award was and what it means to Payactiv?

Safwan:

There is one word in the award, Best For The World, which I really love and that is “For” The World. It’s not Best “of” the world. I mean, that’s another way of looking at it. But I love the fact that it’s Best For The World and we have been selected. So as far as emotion goes, as far as what I believe, well, it’s gratitude. I feel very humbled, humility, of course, a lot of pride. Perhaps, more gratitude, more importantly, we did win it two years in a row. So the possibility of a three-peat and of course, it encouraged us and it has given us more desire to do more and better.

Eric:

That’s great.

Safwan:

So I would like to express a big thank you to the entire B organization. Thank you so much.

Eric:

And just for listeners and anyone else out there, to earn this award, the B Corp organization only awards us to the top 5% of companies that put customers and employees before shareholders. 

And in a world where we’re used to hearing about everyone putting Wall Street first and trying to get their stock price up as quick as we can, and again, make a quick buck, that’s what all we see. That’s this theme, everyone who’s trying to make a quick buck, this is the opposite here. It’s really trying to help people improve their financial situation. So let’s shift gears a little bit and talk more about what’s happening in the economy. 

I know it’s a nervous time out there for some people. We have rising inflation, and a lot of people are feeling pressure at the gas pump and at the grocery store. They’re having a tough time meeting those regular livelihood needs just day-to-day costs, things like that. So what does Payactiv doing to help alleviate that financial stress so many Americans are facing?

Safwan:

Eric, our lens on the world on the marketplace is of people who work inside an emergency room of a hospital. We see the real struggle. We don’t necessarily, or even need to rely on fancy charts and graphs to find out that there is tremendous pain and struggle for millions of people in America. 

So we see the pain and struggle. So let me give you two stats, the cost of gas has gone from $2,000 per year as consumption for a family to $5,000 per year. To be exact, it’s $468.28 cents per month. For an economy where people make about $35,000 a year, that’s the median salary, that’s 12% of their salary towards gas. Of course, there are other livelihood needs like food, fuel, auto, and shelter. Everything’s gone up. And also, the weekly earnings in the United States now are $380 per week for an hourly worker.

These are some stunning stats. So what does Payactiv or EWA do for this? Imagine you have only 1000 calories to eat in a day. Would you eat them in one meal or would you spread them out over the day? Would you waste any food? 

So timely access to earned wages or EWA is the best way to meet livelihood needs and not lose money to fees and penalties that are charged by alternative products like payday loans, overdraft, late fees and then many other little things that are eroding our purchasing power. So that’s what I think earned wage access can do for the economy today, now.

Eric:

So I know there have been some updates to the product recently, including updated pricing that makes EWA even more accessible to a wider group of people at a lower cost. Can you share what the new pricing looks like and what those changes mean and how that aligns with Payactiv’s mission?

Safwan:

Yes. So products are learning systems in some ways and they learn from users because products are experiences. And what we learned in the last two and a half, three years starting March 2020 we actually, went ahead and waived all fees for more than 60 days. In that we saw a few behavior patterns. Granted the number of people that were working at that time was a little less but we saw a pattern of what people need to see as a fee to be able to access this money, it’s a new type. Think of it, it’s a new type of painkiller that is there, it’s like aspirin so we learned something from that. And then as this inflation and this back to work and all that has come in, we also learned some things about our product. And the two things were that the fee has to be simplified.

Safwan:

We had a breakdown of fees that you had to have a program fee or something else so we simplified all that. Now, our service is free for anyone out there. They only have to choose direct deposit on our visa card and they can access their earned wages without any fee anytime the child take money from us during the pay period so that’s the biggest change. And second biggest change is that, if you want to move money to your bank, so if you do a next day or two day bank transfer that’s also free. So these are significant changes which will help the users of Payactiv and all based on experience.

Eric:

And who doesn’t love free? Everybody loves free. So that’s such a great value, especially for somebody who was coming out of those high interest products we mentioned earlier, like payday loans. If you’re paying hundreds of percent of interest rate points on a payday loan, you could end up paying your hundreds of dollars to borrow $50. So here paying $0 and not borrowing, it’s getting money that you’ve already earned so there’s nothing to pay back. And there’s such a huge benefit in compared to some of these old traditional products.

Safwan:

I mean, exactly. There’s one thing that you’ve pointed out many people don’t get, that this is not borrowing. You are simply using your own money with different timing.

Eric:

And that’s just such an empowering opportunity as well, to not have to go into debt if you need to pay rent or cover groceries and pay day’s not till next Friday. So we’ll change gears one more time, we have one final question. So this is the first time we’ve had the CEO on the podcast but you’re also our first CEO to be a guest on the podcast. We’ll hopefully have some other executives in the future. But if there’s other CEOs listening or HR executives, other business leaders, what advice would you give to them to help balance profitability with their own employees’ financial wellness needs?

Safwan:

Eric, the purpose of a business is to make the world better through innovation or through operational efficiency. This begins and ends with people. So as the CEO, I see myself as the chief empowerment officer, not chief executive officer, chief empowerment officer. My message to every CEO is to define how they make the world better. If they can do it in one sentence, that’s a great beginning, everything else comes after that, profit and recognition and whatever.

Eric:

That’s a wonderful answer and a wonderful place for us to wrap up today. This was such a great interview, Safwan. Thank you so much for taking the time to share your insights and your guidance. I know you have access to so much data and information about what’s happening out there. You’re really on the pulse of what’s happening in the economy. So thank you for sharing what you’re seeing happening and offering some tips for how other companies and how workers can improve their financial lives. Because as we always say at the end of the show and the whole theme of Payactiv is to help people live the life they’ve earned. And it sounds like we’ve gotten some great advice around that today. So thank you so much.

Safwan:

Thank you.