Fintech startup launches its 'get paid as you go' services for the first time in the UK
Fintech startup, Wagestream, whose ‘get paid as you go’ service allows workers to access their monthly wages in real-time, has launched its service in the UK.
The company aims to end the ‘payday poverty cycle’, and last-resort measures like payday loans along with it.
Research shows that over half of families cannot afford a £250 unplanned expense - around the same amount as the average payday loan in the UK.
Most UK employees are paid monthly (around 85 per cent), meaning that employee financial stress is uniquely higher in Europe because of the monthly pay cycle.
Wagestream is aiming to combat the problem, allowing workers to access their ‘earned income’ at any time during the monthly pay cycle.
The service can be implemented by companies without impacting cash-flow, payroll or timekeeping processes, and provides instant financial security to UK workers.
David Reed, ops director of Key Security, said: “Partnering with Wagestream has not only provided our staff with better flexible and financial security, but has also had a positive impact on our service delivery with staff volunteering for extra shifts.”
As the first Get-Paid-As-You-Go provider to be accredited by the FCA, the company expects its approach will become the ‘new normal’ and displace the current payday cycle - particularly for employers which operate large numbers of shift and temporary workers, in sectors such as hospitality, security, retail and manufacturing.
Over 20 employers are now piloting the Wagestream platform including Key Security, CitySprint and Fourth, who provide cloud-based hospitality solutions for brands including David Lloyd Clubs.
Co-founded by Portman Wills and Peter Briffett, former COO of YPlan and CEO of LivingSocial UK, the company raised over £4m in funding from huge technology and social impact investors.
Backers include Village, a global VC backed by leading entrepreneurs, including Bill Gates and Jeff Bezos, as well as QED Investors, the London Mayor’s Co-Investment Fund and Fair by Design fund.
Peter Briffett, CEO and Co-Founder of Wagestream, concluded: While the wider and long outdated issue of monthly pay cycles is in desperate need of modernisation, for far too long legal loan sharks have been exploiting the most disadvantaged consumers with crippling high-cost loans.
“By giving workers access to their earnings, they can prevent themselves from going into overdraft, credit card debt or the worst case, applying for a payday loan.”