Fatfish Group enters the salary access sector with the acquisition of BNPL Next
Asia-focused tech venture capital firm Fatfish Group (ASX: FFG) is poised to enter the booming Access to Earned Wage (EWA) industry with the acquisition for 4 , $ 14 million from Australian digital finance company BNPL Next Limited.
BNPL Next owns 60% of pay-on-demand service provider Circopay and has a two-year option to purchase the remaining 40%.
Circopay is a forerunner in the global EWA space with clients in South East Asia and Australia.
The 60% equity that Fatfish awaits at the end of the transaction will complement its strategy of investing in emerging technology trends in digital financing needs.
It will also fit into the group’s plans to roll out Buy Now and Pay Later (BNPL) services across Southeast Asia.
Circopay helps employees access their money as they earn it to meet all of the short-term financial demands (such as school payments, medical emergencies, or vacations) that can arise between shifts. paychecks.
The solution reduces the need for individuals to turn to high cost “debt trap” products such as credit cards, personal loans or payday loans.
The company pioneered the concept in Southeast Asia, where a large portion of the workforce has comparatively lower incomes as well as limited access to financial services.
In Australia, Circopay has partnered with PayGroup (ASX: PYG) which gives it access to over 5 million employee payslips from over 1,000 employers, including the Government of Victoria, Westpac (ASX: WBC) , Electrolux and Volvo Group.
Since its founding, Circopay has raised $ 976,000 in funding and secured a $ 5 million line of credit to facilitate its EWA services.
According to research from the credit company Visa, many people around the world are living paycheck to paycheck and struggling to manage their personal finances.
In the United States, about 44% of employees have saved less than $ 500 ($ 640) for unexpected expenses, and 80% of employees spend time at work thinking or managing their personal finances each week.
The COVID-19 pandemic has exacerbated the problem by forcing organizations to lay off their employees or reduce their working hours.
Service industry majors such as Walmart, Uber, McDonalds, and Domino’s have all adopted some form of EWA program to improve the financial well-being of employees.
Due to its “win-win” nature for businesses and individuals, Fatfish believes that in the near future, EWA and faster pay options will become “table stakes benefits” for many businesses.