Research indicates that 77% of South Africans are struggling financially due to the impact of the Covid-19 crisis. In addition, 86% of these consumers are concerned about their ability to pay their current bills and loans, with 21% planning to borrow the money from family and friends, 8% opting to take out personal loans and 19% having no idea how they will pay.

“Debt not only impacts a person struggling to make their payments, but those around them too – including their employers. Research shows us that financial stress has been linked to a cycle of increased workplace absenteeism, reduced workplace performance, and employee depression. For those in this dire situation they are less likely to plan their spending, less likely to save on a regular basis and are more impulsive on how they spend their money,” says Simon Ward, founder and CEO of Floatpays, a South African fintech offering early access to earned wages for South African employees.

“While employers might consider providing financial assistance to help their employees climb out of the debt hole, this can lead to harming employee relations and have potential cost ramifications should the employee be unreliable with repayments, or worse, disappear with the money.”

Floatpays reduces and often eliminates the friction and angst of employers granting employee loans by allowing employees access to a portion of what they have already earned, at no cost to the business and with only a once-off transaction fee for the employee, no hidden costs and no interest. Unlike a loan, this is an advance on the employee’s already earned money.

The Floatpays technology automatically integrates with the business payroll software to produce payslips that reflect these transactions. At the same time, it eliminates the cost and operational impact of tracking loan arrangements with employees.

Additionally, the platform provides free financial training to empower employees with the knowledge to make better money decisions and the free financial budgeting and planning tool to help employees navigate the complexities of day-to-day money management, stay up to date with upcoming expenses and keep track of spending habits.

The solution can be used by both banked and unbanked employees as well as by those using smart or feature phones. These offerings and capabilities are a world first for fintech’s offering early access to earned wages as a product.

“Our aim is to create positive change by lifting individuals from their current debt spirals toward better financial solutions and ultimately the freedom to build a wealthier, healthier future,” says Ward.