There may not be too many women entrepreneurs on the metaverse, as one expert recently told us, but there are certainly a few in the fintech space. Quite a few in fact. A whole team-leading and running a new idea that is resonating well with employers and employees: Earned wage access platforms.
Nathalie Chamaa, Chief Strategy Officer (CSO) at earned wage platform FlexxPay, has herself spent the last 10 years in fintech.
“There is a lot of technology interest with females. My first fintech job was in mobile payments. Fresh out of college, I had zero technical knowledge, but I learned on the job working with many women with technical expertise,” Nathalie told Economy Middle East in an interview.
“At FlexxPay, our entire product team is composed of women. We have female developers, quality insurance engineers, testers, and other technical staff, all women.”
While this story is not about women top executives and entrepreneurs, it was nice to see how technology si becoming the great equalizer, opportunity provider, and the true space where gender bias doesn’t really exist.
We are here to talk about earned wage access, a technology and service born of these digital times we live in.
Fintech on the rise
“I see a lot of fintech verticals garnering more attention from investors. Companies giving greater access and inclusion with on-demand payment industries, but also creative digital banking that give consumers better rates, more convenience, instant digital access to lending and credit,” Nathalie said, describing trends shaping our digital and financial future.
“Banks are creating digital formats of themselves to offer this, and especially to a generation of new digital users coming to the workforce pretty soon. They would want to see specialized products like open banking, digital lending, BNPL model schemes, and wallets for crypto trading and even earning a wage in Bitcoins.”
We do live in a changing world where companies that do that will have the upper hand and garner more interest from investors and end-users.
And then, there are win-win fintech ideas that just make money.
What is earned wage access?
FlexxPay is an earned wage access platform. Essentially, it is a fintech trying, like other similar companies in the same field, to solve a problem that each one of us has faced at one point in time, and will likely face in the future.
“Everyone has experienced a moment when they could not pay a utility bill or worse an urgent payment born out of a medical urgency,” Nathalie said.
It’s true, and perhaps that’s what credit cards are partially for, in addition to assisting our lifestyle endeavors.
But credit cards are good as long as your credit history is also good, you have enough credit, and the card has not expired.
“It’s also not your money. You are borrowing the money. With earned wage platforms, the money you take is yours to begin with,” Nathalie explained.
“There is huge appetite on both sides of the coin, meaning from both employees and employers.”
Who is it for?
This actually happened. Assume you are at the metro station and find yourself, for one reason or another, without money to charge your card to go to work or return home.
With an earned wage access service, no problem. You would receive immediate funds that get you promptly on your way.
“It’s payment access in real-time, instantly, to your already earned salary, allowing you to pay that bill in a click, walk away, without having to rely on more expensive alternatives. Loans or credit cards are monies that you haven’t earned, are owed, and which if you’re not careful, can land you in a worse place,” Nathalie explained.
“The service we and others like us provide can happen any time of the week, any hour of the day. There is a great appetite for it from employees. For them, it’s like a fringe benefit.”
What about employers? What’s in it for them?
“Employers are keen to roll this out to their employees, because when they do that, it has no impact on their cash flow, no additional workload, and comes at a very nominal cost,” said Nathalie.
“The value of the service turns out to be huge as team performance increases, as staff becomes more productive, motivated. It’s proving instrumental to the success of companies.”
Employers can sign up and due diligence on the companies can be performed in under an hour, according to Nathalie, describing her company’s onboarding process.
The companies’ only task after that is to pay Flexxpay the monies they advanced those companies’ own employees.
Can employees overspend their own earned salaries?
Nathalie said that data from the company’s current database, which covers a 3-year operation since launch, don’t show people abusing the service.
“They only use it when they need it. We also have safeguards. You can’t access your entire salary and we have a hard cap of UAE 3,000 dirhams,” she added.
And because it’s a cash-on-demand service, FlexxPay has in place a team dedicated 24-7 for the UX journey.
The business model
Flexxpay follows a fixed fee model regardless of how much money employees get an advance on their salaries.
“We collect UAE 25 Dirhams, whether you take out UAE 2000 or UAE 100 dirhams. We have a way that allows the employer to subsidize that fee, as a service for their employees,” Nathalie pointed out.
“We work on volume, and we are company agnostic, so we onboard any company of any size in any sector, private or public. The bigger the better, but a company of 10 is also fine.”
Similarities with BNPL
The buy now, pay later (BNPL) commerce scheme that is also today in vogue differs from earned wage access (EWA) platforms different models. It’s true that both allow access to money early and in advance for things consumers need, but that’s where the similarities stop.
“BNPL gives end-users the ability to get items or things they need but on a credit basis. With EWA, the money you borrow is yours, and you do not pay interest on it. Once you earn it, it’s yours,” Nathalie explained.
“We are a financial wellness company. People are using this money for emergency and not to splurge.”
What’s next?
Flexpay has, according to Nathalie, onboarded about 100 companies spread between UAE and KSA, with 50,000 enrolled users on the platform and scaling.
“We are expanding into Egypt, going live in the near future.”
