Many people have never heard of payday loans, yet it is estimated that 12 million people in the U.S. use them as a way to receive instant cash advances while awaiting their weekly paychecks. Unfortunately, these short duration loans typically have high predatory interest rates that Clair, a social impact startup that provides financial services to workers, seeks to remedy.
This past week Clair introduced at the HR Tech Conference their trademarked fee-free Payday Wallet that will challenge the well-established business models that are so costly to workers’ financial health. As a mission driven social enterprise Clair seeks to have a positive impact in communities by embracing social responsibility in their business practices, while pursuing a sustainable business model.
“We believe that workers deserve to have access to the money they’ve earned, right when they earn it, and they should not have to pay a fee just to receive this access. This is why we created the fee-free Payday Wallet,” says Nico Simko, Co-Founder and CEO of Clair.
Clair ‘s app distinguishes its services from those of traditional earned wage access providers by enabling employees to clock out and instantly cash out their earnings for free. This is accomplished by having the Payday Wallet embedded directly into HR tech platforms. This innovative approach reaches millions of employees that brings with it other benefits such as accurately predicting worker earnings and providing faster advances for the hours they’ve worked.
The social impact, embedded fintech startup has gained the early support of HR tech platforms When I Work, Work well, and Attendance on Demand. These partners are part of a longer list of leading HR tech platforms that now have over 3 million employees choosing Clair.
Because the app is embedded into a HR tech platform, employers do not have to integrate it on their end, while employees benefit from the app at no additional cost. Clair found that the recruiting and retention of hourly workers greatly improved and job performance jumped by 86%.
In addition to avoiding high interest fees, Clair’s offerings include access to other financial tools and services that includes a Clair Debit Mastercard® with free withdrawals at over 40,000 U.S. ATMs, access to virtual payment options like Google Pay, Apple Pay, and Samsung Pay and free domestic ACH transfers.
“From the start, Clair’s goal has been to empower America’s workers to reclaim control over their finances. By waiting two weeks for a paycheck, workers are essentially loaning interest-free money to their employers, and we now have the technology to change this antiquated system,” says Simko.
Clair took a major step forward in June when it announced the closing of a $15 million Series A funding round led by venture capital firm Thrive Capital, bringing their total funding to $19.5 million. This occurred following the company receiving seed funds from a group of investors led by Upfront Ventures.
“We’re thrilled to support Clair’s mission to transform the way that hourly workers get paid,” said Kareem Zaki, Thrive’s General Partner. “By combining best-in-class financial infrastructure with consumer-centric product design, Clair’s offering is uniquely positioned to help a large but chronically underserved market get better access to their money.”
Clair is one of a growing number of impact startups that are seeking profitability while engaging in activities that align with the goals of social entrepreneurship. Fintech startup SeedFi that is tackling credit challenges of underserved communities is one example. The company is backed by Andreessen Horowitz who led its recent Series A round.
As a mission driven social impact startup, Clair is focused on providing a fee-free on-demand pay service for America’s workers that will improve their financial health. They want to break the paycheck-to-paycheck cycle that adversely impacts such a large number of them. Offering the fastest free paydays is their solution.
