Founded in 2019 and a participant in the S21 cohort of the Silicon Valley-based Y Combinator accelerator, Floatpays is a technology platform that enables on-demand access to pay, seamless savings functionality, and financial education to build employee financial wellness.
Floatpays is a digital platform that offers on-demand access to pay, seamless savings functionality, and financial education to enhance employee financial wellness.
Floatpays is also an on-demand wage access platform that helps employees access, spend, save, and manage their money.
The problem they are solving is that more than 75% of the 12 million employed South Africans run out of money before the end of the month, and 52% of those end up borrowing money to survive.
Informal lending is the only option for most borrowers, with interest rates anywhere between 30-50%. The story is the same in most African countries where payday/micro-lending has become the norm amongst lower-income earners.
Their app features include financial education, a budget planning tool, cash access, and voucher purchases all from wages earned but unpaid. They are currently working on a savings product to promote long-term financial resilience.
How it Works
Payroll System Integration
Floatpays securely integrates with your company’s existing payroll system via an API or flat file (spreadsheet) to calculate an employee’s earned-but-unpaid income.
This secure integration enables the automatic reconciliation of earned wage access or savings account transactions via the app/USSD, with an employee’s paycheck. Integration via API allows for automatic updates on the Floatpays system, of new joiners or leavers within an organization.
If integration is done via a flat file, this information can be easily updated by an employer on the Floatpays Employer Portal.
Employer Portal
Employers set the rules that govern employee access to Floatpays. These rules can be self-managed by the employer using the Floatpays Employer Portal.
These rules control the percentage of earned wages that an employee can access; the number of withdrawals that an employee can make during the pay cycle and more. The Employer Portal also gives an employer the ability to add or remove employees from the Floatpays system.
Financial Reconciliation
At the end of an employer’s pay cycle, Floatpays will issue an ‘invoice’, which is a statement of account of all their employees’ transactions during the pay period.
The total amount of these transactions is paid over to Floatpays by the employer, at the end of the pay cycle.
Cost
There is zero cost to the employer to offer Floatpays as a benefit to their staff.
An employer may choose to subsidize a portion or 100% of an employee’s transaction fees associated with cash withdrawals (voucher withdrawals are fee-free).
An employer may choose to subsidize the savings account once-off set-up fee of R5.00* and/or the cash-out fee of R20.00*, for their employees.
Because Floatpays is not a loan, they do not charge interest on any earned wage withdrawals (via cash or voucher).
They do charge employees a small once-off transaction fee for cash withdrawals (EFT & Instant Money Vouchers). You can think of this charge as similar to a bank charge for a withdrawal at an ATM. The charges consist of a flat fee plus a % of the amount withdrawn.
The Floatpays savings account does not carry a recurring monthly account fee. There is a once-off account set-up fee of R5.00*. When employees cash out on the pay-out date, a once-off fee of R20.00* applies.
Security
All data is stored and encrypted at rest using an industry-standard AES-256 encryption algorithm.
Floatpays also uses Web Application Firewalls (AWS WaF) that protect their web applications and APIs against exploits that may affect availability, and compromise security and data safety. All transfer of data is performed securely over TLS-encrypted networks.
Additionally, the third-party application, network penetration tests, and CREST-accredited continuous ethical hacking are performed by CovertSwarm against their entire product suite to ensure they comply with the highest security standards.
Employer Support
A Customer Success Manager is assigned to each employer. This is the employer’s dedicated ‘go-to person’ for any queries or issues related to the Floatpays service. Employers have a direct line to their Customer Success Manager.
Employers are assigned a dedicated Floatpays Customer Success Manager (CSM). Your CSM will be available to you as and when needed to support you with any system queries and troubleshoot any issues.
You will also have access to Floatpays’ self-service Employer Portal. Your CSM will train your team on how to use the portal.
The portal enables you to directly change your company’s payroll information on the Floatpays system – you can perform actions such as removing employees who have resigned, updating employee contact details, changing an employee’s pay cycle from weekly to monthly, and more.
Founders
Simon Ward
Simon Ward currently works as the Founder and CEO of FloatPays.
His previous experience includes over 20 years working as an entrepreneur and business leader in the startup and growth phases of businesses in the fintech and eCommerce business verticals.
Additionally, his work passion is to build products that disrupt existing markets and make a positive impact on how we live our lives now and in the future.
Simon has worked globally to deliver business growth and market success with a few exits for businesses I have been fortunate enough to work with and help grow.
Investors & Funding Rounds
Kepple Africa Ventures, FINCA Ventures
Floatpays has secured just under US$4 million in an oversubscribed seed funding round to help it expand across Africa.
Having seen 43 percent growth in its employer base and a 70 percent increase in users since taking part in Y Combinator, the startup has raised a seed round worth almost US$4 million from investors including Global Founders Capital, Base Capital, Finca Ventures, Raba Partnership, and 4DX Ventures, as well as angels Alan Rutledge, Shaun Hurwitz, Youcef Oudjidane and Olugbenga Agboola, the co-founder and CEO of Flutterwave.
The new investors join existing backers Founders Factory Africa, Kepple Africa Ventures, Norrsken Foundation, and MFS Investments.
Main Competitors
pay theory: This is a payments platform tailored for Family Tech SaaS vendors to education, healthcare, childcare, and children’s enrichment providers.
Paystack: It lets businesses accept payments via credit card, debit card, money transfer, and mobile money on their websites or mobile apps.
Kudi: This is a financial service provider that focuses on providing access to electronic banking and financial services.
Related:
Paps: Story, Founders, Investors & Funding Rounds