Fintech looking to end ‘payday poverty cycle’ launches in Ireland
The London-based company has developed what it describes as a “get-paid-as-you-go” platform that allows employees to access their wages early for a flat fee.
Wagestream which was only founded this year, says it is on a mission to end what it calls the “payday poverty cycle” experienced by thousands of households who experience difficulties making ends meet.
Its platform allows staff of participating companies to gain access to a portion of their wages ahead of time, thereby ensuring they don’t have to go overdrawn or be reliant on credit cards or high-interest payday loans.
More than 25 employers with over 25,000 staff are already using the service in the United Kingdom, following its launch there last month. Participants include gym chain David Lloyd.
“The early results have been stunning: from eliminating financial stress to improving productivity and retention, shortening the link between work and reward is good for businesses and their people,” said Wagestream co-founder and chief executive Peter Briffett.
The former chief executive of LivingSocial for UK and Ireland, said the start-up was looking forward to working with Irish companies who wanted to give their employees “greater financial freedom and control”.
Adam Hankin, a former head of sales for both Linked Finance and LivingSocial, has been appointed general manager of Ireland for Wagestream, which is also backed by social impact charities such as the Joseph Rowntree Foundation.
Mr Hankin said that despite strong economic growth, recent figures from the Central Bank showed that many Irish households were still struggling financially.
He cited recently published Central Bank research which showed that 350,000 people were customers of high-cost moneylenders in Ireland last year, borrowing €268 million at interest rates of up to 288 per cent.
“The crippling problem of predatory, high-interest moneylenders remains: Ireland’s working population should be given the freedom of accessing their earned income, removing the inflexibility they currently face with the monthly pay cycle,” said Mr Hankin.
According to Wagestream, its service can be deployed by companies without impacting cash-flow, payroll or timekeeping processes, and employers can opt to implement it as an interest-free option for teams.
The start-up last month raised £4.5 million (€5.09 million) in funding from backers which included QED Investors, Firestartr, and Village Global, a $100 million (€88 million) venture capital firm that promises mentorship from tech figureheads such as the founders of Amazon, Microsoft, Facebook and LinkedIn.
The London Mayor’s Co-Investment Fund and the Fair by Design fund, whose charities include Big Society Capital, Nominet Trust and the Joseph Rowntree Foundation, are also supporters of Wagestream.