PayActiv Secures $9.2 Million in Financing to Innovate Financial Wellness Efforts That Reduce Financial Stress and Increase Productivity in the Workplace
February 17, 2016 09:00 AM Eastern Standard Time
SAN JOSE, Calif.–Following a successful 2015, PayActiv, FinTech startup, announced that it has secured $9.2 million in financing from investors since the company was seeded by an early stage fund affiliated with SoftBank Capital. The funding will help to grow PayActiv’s suite of turnkey, employment-based financial wellness offerings.
@PayActiv provides on-demand access to earned but unpaid income – empowering consumers to be #debt-free tomorrow
Founded by Safwan Shah, a payments industry veteran, PayActiv is a certified B Corp. with the mission to bring viable alternatives to conventional small dollar and expensive lending products that lead individuals into a downward spiral of indebtedness.
“PayActiv’s business model tackles the root cause of debt spiral among millions of workers across the world, and it is one of the most exciting innovations in the global FinTech space today,” said Kabir Misra, Managing Partner of SoftBank Capital and PayActiv Board Member.
In a survey conducted by Bankrate, 63 percent of Americans said they could not cover an unexpected $500 expense without borrowing or selling something, while more than $100 billion is earned every week but remains stuck in transit, waiting for payday. Unlike PayActiv, Alternate Financial Services – payday loans, title loans and check cashing outlets – all lead to additional fees and debt.
PayActiv has redefined financial wellness through its cloud-based MyMoNow solution, which reduces the time lag between earning income and allocating it to daily necessities. MyMoNow is unique within the financial wellness marketplace in that it is offered by employers as a membership program, providing employees with rapid, secure and convenient access to small dollar amounts, as well as free bill pay, bank transfer, budgeting and savings tools. Employees can access earned – but as of yet, unpaid – income up to $500 instantly to address immediate needs without the fear of late fees, overdraft fees, or additional debt. FinTech for ordinary people.
“Anybody who cares about the working poor should be proud of PayActiv for helping eliminate the billions of dollars in fees paid to payday lenders and banks,” said Rajiv Lal, Stanley Roth, Senior Professor of Marketing and Retailing at Harvard Business School. “Technology is our best hope for improving the lives of the unbanked.”
Employees enroll in PayActiv’s program just as they would for any other benefit offered by their employer, and when an employer offers MyMoNow as part of its benefits package, all employees are automatically eligible – no credit checks and no turndowns. Typically an employer can go live with the MyMoNow solution within one to two days.
Employers offering MyMoNow incur no risk, no out-of-pocket expense and no disruption to cash flow or business process. Instead they gain quantifiable benefits from improved employee productivity, satisfaction and retention. For example, according to The American Institute of Stress, financial stress costs employers more than $300 billion a year in the form of lost productivity, increased absenteeism, accidents and turnover, not to mention skyrocketing worker compensation, medical, legal and insurance costs.
“PayActiv’s product is a seamless, turnkey solution that does not require any changes to our business processes and is a true win for us and our employees,” said Kendall Johnson, CFO of Baton Rouge General Hospital.”
“The growth PayActiv experienced in 2015 far exceeded my expectations, and with this funding, we will continue to expand and enhance our innovative financial wellness programs that help all workers lead a better life with security, dignity and savings,” said Safwan Shah, CEO and founder of PayActiv. “Living on debt is to live a borrowed dream, and with PayActiv, employers help their employees own their dreams and take control of their personal finances, and avoid debt.”
Headquartered in Silicon Valley, PayActiv is a financial technology company that offers a comprehensive suite of turnkey, employment-based financial wellness offerings. As a certified B Corp., the company’s mission is to enable workers of every income level lead a better life with security, dignity and savings. The company achieves this through its MyMoNow solution, which provides employees rapid, secure and convenient access to their earned but unpaid wages for a nominal fixed transaction fee – resulting in zero added debt. For more information, visit www.payactiv.com.
*The Payactiv Visa Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card. You should consult your Cardholder Agreement and the Fee Schedule at payactiv.com/card411. If you have questions regarding the Card or such fees, terms, and conditions, you can contact us toll-free at 877-747-5862, 24 hours a day, 7 days a week.
1 Many (but not all) employers, government benefits providers, and other originators send direct deposits early with an effective of 1-2 days later. Beginning with your second direct deposit of at least $5 from the same source, Central Bank of Kansas City (CBKC) will post the funds to your Payactiv Visa Card when we receive it, rather than on the effective date. This may result in your having access to the funds sooner. The date CBKC receives your direct deposit and the effective date are controlled by the originator.