ImpactAlpha, December 10 – British workers are struggling with minimal savings and mounting debt, much like American workers. Adding to the pressure, they often have to budget around monthly rather than bi-weekly paychecks.
“They’re basically offering interest free credit to their employers,” for 30 days at a time, James Herbert, founder of fintech company Hastee, tells ImpactAlpha.
U.K.-based Hastee is one of a handful of companies helping workers alleviate financial stress by allowing them to tap unpaid wages as they earn them. The company partners with small and large employers alike, fronting cash to their workers as they need it, then recouping the money through their clients’ payroll.
Umbra Capital and IDC Ventures are backing the company’s growth with £8 million ($10.5 million) in equity and £200 million ($263 million) in debt financing.
How it works
Employees can withdraw up to £100 in wages for free before payday. After that, they pay a flat fee of 2.5% for every transaction. “It just increases the frequency of pay,” explains Herbert. “There’s no interest or chance you’ll miss repayment.”
Since launching in 2017, most of Hastee’s app usage stems from the “low-paid and variable” workforce, who use Hastee to cover emergency bills and travel costs, Herbert says.
“We’re also finding there’s a direct link to productivity,” he adds. “Employees are actually doing more work than they were before, especially in the gig workforce. They’re earning more as well.”
Also in the U.K., Wagestream raised £40 million for a similar concept and Salary Finance raised $33 million this year to help workers avoid payday lenders. (Salary Finance is making a push into the U.S. as its second market.) In the U.S., savings-focused fintech company Even also offers earned wages payments.