Payactiv Inc. - Company of the Year - Financial Services

Company: Payactiv Inc.
Company Description: Payactiv is the originator and leading provider of Earned Wage Access (EWA). Founded in 2012 by Safwan Shah, Ijaz Anwar, and Sohail Aslam, we have 250 employees in the US, Canada, Australia and Pakistan. We provide EWA to over 1,400 businesses including Walmart. Payactiv most recently won Finovate's Award for Sustainability, in addition to HR Tech and other FinTeh awards.
Nomination Category: Company / Organization Categories
Nomination Sub Category: Company of the Year - Financial Services - Medium

Nomination Title: Payactiv, Inc.

Payactiv was founded in 2012 to repair themisalignment between the biweekly receipt of wages, and the multiple days in-between when bills and other expenses must be paid. This misalignment creates a cash flow shortfall, which lower-income workers have filled via expensive forms of short-term credit such as payday loans, overdraft fees, and late fees that siphon off 10% of their income each year.

This had nothing to do with how workers manage their money, but ratherthe timing of pay.Why mustemployees wait to get paid, in a world where everything can be obtained on-demand? If you've earned it, and you need it, you should be able to access it.

Not only would it help workers, employers would repair productivity leakage from financial stress, and improve retention and engagement.

So Payactiv invented Earned Wage Access (EWA), whichprovides workers with access to wages they have earned but not yet been paid on. It is their money. It is not a loan.We now provide EWA to over 1,500 businesses, serving nearly two million workers (including 500,000 at Walmart), and have settled over $4.5 billion in transactions in the last two years alone.

2019: Few knew of EWA.The regulatory environment was uncertain.
2020: EWA coverage exploded. HR personnel have discovered it. Federal regulations are established.

Direct engagement with the CFPB resulted in unprecedented actions. The bureau:

-Acknowledged that Payactiv created a new financial product
-Established criteria under which EWA was not considered credit
-Granted us the first-ever Approval Order (AO) for its Innovation Sandbox.
-Refers to Payactiv’s EWA as an “innovative mechanism for allowing consumers to bridge the gap between paychecks” and“differs in kind from products the Bureau would generally consider to be credit.”

Payactiv also:

-Persuaded NJ legislators to change a bill banning EWA into one enabling it, passing the Assemblyunanimously, 75-0.
-Signed an MOU with California’s DFPI to provide data on EWA from which it can formulate regulatory approaches.
-Waived fees during COVID-19.
-Instituted the lowest fees in the sector.
-Instituted option to get full paycheck two days before payday.
-Was chosen by NYC as payment provider to thousands of taxi drivers who delivered food and essentials to residents.
-Saved users$240 million in interest and fees and settled $2 billion in transactions.
-Partnered with Paychex to provide EWA to 650,000 small businesses, and withVisa Direct to offer a prepaid debit card.
-Achieved ISO/IEC 27001:2013 Certification
-Produced 2 short films celebrating essential workers that garnered 2.7M views.
-Raised $100 million in Series C funding from Eldridge Industries.
-Became a Public Benefit Corporation.
-Received IPA’s Consumer Champion Award and Finovate’s Excellence in Sustainability Award.

Payactiv founded, and remains the leading provider of, Earned Wage Access.

The achievements highlighted above are the result ofspecific communications, legislative, and regulatory strategies.Our goal was to place Payactiv and EWA firmly on the radar of trade media by aggressively pursuing regulatory and legislative clarity.

The CFPB’s Advisory Opinion states that EWA is an “innovative way for employees to meet short-term liquidity needs that arise between paychecks without turning to more costly alternatives like traditional payday loans.”

This fundamentally changes the liquidity situation for tens of millions of American workers; reduces their financial stress; and reduces turnover while increasing productivity for American businesses.

The Approval Order wasonlygranted to Payactiv because of our pro-active engagement with the CFPB’s Innovation Sandbox.No other EWA provider even applied.No other EWA provider can credibly claim to be compliant with the Advisory Opinion.Payactiv has become the gold standard for EWA.

Our communications head established relationships with leading trade media, including one site where he now has his own column on EWA.No other EWA provider was as regularly featured than Payactiv.

No other provider is committed to all stakeholders nor held accountable to serving a public benefit.We specifically chose to face the rigors of being a Public Benefit Corp, certified B-Corp, or member of Conscious Capitalism.

When unemployed taxi drivers were hired by NYC to deliver essential food and medicine during the pandemic, we offered to be the payment provider for the drivers.No others were considered.

Relevant Content Links

Who we are: https://www.payactiv.com
Our CEO's Tedx Talk on why EWA is essential (12 min): https://www.youtube.com/watch?v=lJHrRN3DkmM
Our animated film celebrating essential workers (2min): https://www.youtube.com/watch?v=Er0mr-Rw2qQ
User Testimonial (1 min): https://payactiv.wistia.com/medias/tboh1cclf2
BenefitsNews Op-Ed: https://www.benefitnews.com/opinion/earned-wage-access-the-most-important-benefit-in-a-post-covid-19-world

Evidentiary Links:

https://files.consumerfinance.gov/f/documents/cfpb_advisory-opinion_earned-wage-access_2020-11.pdf
https://files.consumerfinance.gov/f/documents/cfpb_payactiv_approval-order_2020-12.pdf
https://www.paychex.com/newsroom/news-releases/paychex-payactiv-on-demand-pay-covid19
https://www.nasdaq.com/press-release/visa-and-payactiv-join-forces-offer-demand-access-earned-wages-disbursed-payactiv
https://finovate.com/finovate-award-winner-unveiled/
https://dfpi.ca.gov/wp-content/uploads/sites/337/2021/01/Admin.-Action-Payactiv-Inc.-Memorandum-of-Understanding.pdf
https://www.payactiv.com/press-release/payactiv-provides-free-liquidity-for-workers-during-crisis/
https://leadingage.org/sites/default/files/PayActiv-Access-Flyer-Partnerships-LEADINGAGE-06-26-2020.pdf
https://www.payactiv.com/blog/payactiv-partners-nyc-taxi-driver/
https://www.prnewswire.com/news-releases/payactiv-awarded-isoiec-270012013-certification-301199236.html
https://www.payactiv.com/press/payactiv-becomes-public-benefit-corporation/