In spite of the so-called Great Resignation, wages haven’t risen as dramatically as some economists anticipated. 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.
Tate Hackert, the CEO of Calgary-based ZayZoon, asserts inflexible pay schedules are a major contributor to the inequity. 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.
To grow the business, ZayZoon today closed a $12.5 million funding round co-led by Carpe Diem Investments and Alpenglow Capital with participation from InterGen Capital, Prairie Merchant Corporation, and several angel investors. Alongside a $13 million loan from ATB Financial, the proceeds bring ZayZoon’s total raised capital to date to $25 million.
“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. “The same patterns emerged — people with relatively [good] 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.”
ZayZoon’s platform allows small- and medium-sized businesses to implement what’s known as an earned wage access (EWA) program. EWA gives employees access to some of their accrued wages before the end of their payroll cycle. Workers still receive the entirety of their paycheck at the end of each cycle. However, the advancements made are subtracted from the direct deposit account.
ZayZoon funds early wage requests itself to mitigate risk on the employer side. 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). Companies can opt — but aren’t required — to subsidize the benefit.
Funding 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. 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.
“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. “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.”
ZayZoon claims that Sonic, McDonald’s, Domino’s, and Hilton franchisees are among its customers.
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https://techcrunch.com/2022/08/03/zayzoon-charges-employees-5-to-get-paid-sooner/