For example, in New Jersey, recently enacted rules mandate that EWA providers confirm a customer’s earned income before sending them an advance and get an employee’s consent before getting information about workers from employers. Consumer Financial Protection Bureau (CFPB) and the California Department of Financial Protection and Innovation. India’s Refyne raised $82 million to do so in January, while platforms like Branch, DailyPay, and Even have secured hundreds of millions of dollars for their EWA services.īut in spite of VC cash and endorsements from big-name brands like Uber, Lyft, and Walmart, EWA is under increased scrutiny from regulators, including the U.S. ZayZoon is a part of a massive industry, to be sure, with research firm Aite-Novarica Group estimating that EWA providers moved about $9.5 billion in pay in 2020.
ZayZoon claims that Sonic, McDonald’s, Domino’s, and Hilton franchisees are among its customers. “Over 3,000 businesses offer ZayZoon to their staff today … Depending on the industry and employee demographics, it’s typical for a business that rolls out ZayZoon to have 25% to 45% of their workforce accessing ZayZoon regularly.” “Employers assume implementing an EWA program takes immense effort, but ZayZoon can fully activate a business in less than 1 hour, with the majority taking less than a few minutes,” Hackert said. Whether or not they decide to go the prepaid route, workers can link ZayZoon to their bank accounts for spending insights in addition to alerts of overdraft and minimum account balance fees. Companies can opt - but aren’t required - to subsidize the benefit.įunding requests are disbursed “within minutes” to employees’ accounts, or workers can sign up for a ZayZoon-branded Visa card that acts like a prepaid debit card (and eliminates the $5 fee).
The service is free for companies to use, but ZayZoon charges workers a $5 fee to choose how much of their wages they’d like to access (up to $200). ZayZoon funds early wage requests itself to mitigate risk on the employer side. However, the advancements made are subtracted from the direct deposit account. Workers still receive the entirety of their paycheck at the end of each cycle. EWA gives employees access to some of their accrued wages before the end of their payroll cycle. ZayZoon’s platform allows small- and medium-sized businesses to implement what’s known as an earned wage access (EWA) program. “The same patterns emerged - people with relatively incomes that needed a small amount of capital for a small amount of time just to get by … I sought out to create a product that could help employees in their most vulnerable moments, while staying socially responsible and true to a mission of improving their overall financial health.” “Saving every penny I made, at the age of 16, I provided mortgage financing to a family friend in return for interest payments,” Hackert told TechCrunch in an email interview. Alongside a $13 million loan from ATB Financial, the proceeds bring ZayZoon’s total raised equity to date to $25 million. To grow the business, ZayZoon today closed a $12.5 million funding round co-led by Carpae Investments and Alpenglow Capital with participation from InterGen Capital, Prairie Merchant Corporation, and several angel investors. That’s one of the reasons he founded ZayZoon, he says - so that workers can access pay when bills come due rather than on a fixed schedule. Tate Hackert, the president of Calgary-based ZayZoon, asserts inflexible pay schedules are a major contributor to the inequity. About 41% of workers recently surveyed by Willis Towers Watson say that they’re living paycheck to paycheck, while the Bureau of Economic Advisers reports that personal savings rates reached a seven-year low in April - reflecting the dire financial situation many workers find themselves in. In spite of the so-called Great Resignation, wages haven’t risen as dramatically as some economists anticipated.
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