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Watch the PayActiv presentation and demo by Safwan Shah at the Finnovate Spring 2015
A little boy when 9 years old witnessed a famine that killed 3M people in India. From that point, Amartya Sen, an emeritus Harvard professor now, was determined to find why millions perished in famines when the relative food supply is unchanged.
His conclusion was stunning. Millions perished not because of a lack of food, but due to the lack of distribution of food. For this discovery he was awarded the Nobel Prize in Economics in 1998.
Today, in the United States there are 70M or 50% of working Americans in severe financial stress and living paycheck to paycheck. Simultaneously there are $100B every week that employees have already earned but cannot access because payroll systems are designed like a cap which opens once every two weeks and gets shut again while millions remain thirsty daily.
So just like there was plenty of food, in this case there is plenty of inaccessible money ironically belonging to the very people who pay over $50B every year in over draft fees, pay day loan fees and other title loan fees. PayActiv challenges this status quo with a revolutionary financial invention.
Our mobile application is accessible from both the iOS and Android store and what it does for the employees is to access their earned but unpaid salary - so we align the timing, the timing gap between earning and spending.
We work with employers and HR departments to deliver a financial wellness program and help them accomplish their primary objective. Retain better, recruit better and engage better with your employees. So now I’ll go into the application and show you how it works.
The use case for you here is that I’m an employee of a company. My employer has signed up with PayActiv. I make a certain amount of money every week or every two weeks but every day I have earned something and that something is what is what we call the stuck funds and PayActiv puts that money in the hands of the employee.
So as an employee, the first thing I want to know is how much money do I really have. Turns out I have $1,500 and you can see right at the top of the screen. Now in order to access the money I am most likely in a situation where I’m either going to end up paying a penalty or late fee. So I want to now access the money.
So there are a couple of ways that people access money. They go to an ATM to withdraw cash, but that means you have money in the bank account. But if the money is actually stuck and it’s with your employer, you’ve earned it but not been paid, then there is no such way. PayActiv, since we make that happen so there are a couple of choices.
Either you can transfer the money straight off to your bank account. So you go ahead, select transfer to bank account, you’ve enrolled already, you have a couple of accounts enrolled, we allow several accounts, you select Bank of America, you go ahead, select that, let’s say you need was for $223.23. You go ahead, select that, review your term and conditions. There is no interest rate that we charge on anyone. It is a flat $5 fee whatever amount you take between $100 to 500. You go ahead, select that amount, agree to it and the money has been transferred to your checking account either the same day or the next day it will be available to you.
If your need is even more urgent and what you really need is instant cash, we make that possible too.
We have built a network of alliances where you can actually go and pick up cash from an ATM machine or from a retail store by giving a code. And you select your money just like that except now you get it in cash.
Besides that we also allow an employee to pay bills because bulk of the fees and the penalty fees that are charged to underserved employees and people who don’t make enough money is over late payments. So we also give them bill pay service from the same app. You can set up your billers just like a mobile bank account. And you can go ahead select whichever biller you want and go ahead and make that bill payment immediately or next day.
But it gets better. We don’t stop there. We actually have a savings tool for employees. As you know if I ask you that would you be able to save 10% or $50 or $500 every Friday, most likely many people will say no that would be difficult.
But if I ask you can you do $10 every day. Some people will agree and say that is easier. We take that a step further. We allow people to save based on time. So I work 40 hours a week, I can chose to save 15 minutes or 1 hour every day. So with this minor tweak, suddenly an employee or a person is able to save money much better and much more effectively. So that is our savings tool. We call it the intelligent cash manager.
So besides all these services, this is just the beginning, we are also developing tools for employers to give bonuses, rewards and incentives to employees.
Today the PayActiv service is being deployed in multiple states in the United States. There are over 10,000 users in the process of enrollment and we are in the process of scaling the business.
We think it is an idea whose time has come.
If you were able to download the app from that number, you are already enrolled.
Please come to our exhibit booth outside and we might surprise you a little more.
Thank you very much.