FinTech on-demand salary access provider Earnipay has closed a $4 million seed round, the Nigerian company announced Thursday (Feb. 17).
The cash will be used to speed development of its tech platform to serve large employers. By doing so, Earnipay said it will provide employees with tools to make better financial decisions and improve their quality of life. The company said it expects to offer its on-demand salary to 200,000 employees by the end of 2022.
The two-month-old company, tested since last fall, was launched by CEO Nonso Onwuzulike to transform traditional paydays to any day and improve the financial well-being of workers, the company said.
Earnipay said it uses technology to offer workers access to their salaries into their accounts flexibly, in real-time at no cost. The company partners with employers to integrate with their payroll systems to offer its services. Employees can track and withdraw their accrued salaries via the app.
“The monthly pay cycle means employees are often unable to afford daily expenses, cover emergencies or take advantage of immediate financial opportunities,” said Onwuzulike in statement. “Earnipay exists to address this problem and offer an ethical alternative to instant salary access while helping employers improve employee engagement and retention at zero cost to their business.”
Financing was led by Canaan and with participation from XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital and Paystack CEO Shola Akinlade.
Instant disbursements increased last year as nearly three times as many consumers received such payments compared to 2020, according to PYMNTS research.
See also: Deep Dive: The Growing Demand for Instant Payment Options Across the Economy
Instant disbursements could overtake Automated Clearing House payments as the most popular disbursement method in the United States this year. A survey showed 37% of consumers were familiar with instant payments in 2021, compared to about 25% in 2020.
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NEW PYMNTS DATA: ACCOUNT OPENING AND LOAN SERVICING IN THE DIGITAL ENVIRONMENT
About: Forty-two percent of U.S. consumers are more likely to open accounts with FIs that make it easy to auto-share their banking details during sign-up. The PYMNTS study Account Opening And Loan Servicing In The Digital Environment, surveyed 2,300 consumers to examine how FIs can leverage open banking to engage customers and create a better account opening experience.
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