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Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

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Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#31

Post by asukhwani »

andrewingram wrote: post #16
nathancahill wrote: post #10

Earlier quoted context omitted.

Wow, you aren't kidding. Even the copy on the landing page is a Spanish translation of Wagestream's landing page.

At first I thought I was looking at a newly-launched Spanish brand of Wagestream (they have launched in other countries under different names, so it wouldn't be unexpected). I know Payflow has a subtly different value proposition (not charging for withdrawals). And it's totally conceivable that this is the obvious UI for this feature set, but it's really hard to miss the glaring similarities.

Indeed! We really like the idea of making the employer pay for it. We think it makes it a better benefit if the employee doesn’t have to pay.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#32

Post by asukhwani »

andrewingram wrote: post #8

It's a great problem to solve, and killing the payday loan industry is a good thing to do. Out of curiosity, why is the app UI and feature set practically identical to Wagestream (I worked there last year, so i'm pretty familiar with it)?

Interesting observation! There are 100+ startups in the world trying to help with on-demand pay! Most of them have a very similar UX/UI.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#33

Post by colejohnson66 »

qnsi wrote: post #30

I worked at a company that was working on this. I left because of ethical reasons. >Workers living from pay check to pay check have traditionally been vulnerable to exploitation And the proposed solution doesn't fix that. Most of those people don't have a problem with unexpected expense once a year. They don't budget and are short on cash every month. So now imagine Bob needs money halfway through the month. He takes…

> And the proposed solution doesn't fix that. Most of those people don't have a problem with unexpected expense once a year. They don't budget and are short on cash every month. So now imagine Bob needs money halfway through the month. He takes out 50% of his pay. He uses is for immediate needs and than has to live at 50% of his pay for the next 1.5 month.

I think the idea is that it helps people avoids predatory payday loans. If Bob needed 50% of his pay for an emergency, he could go to a payday loan and end up spending a whole paycheck or more just paying it back over time.

The solution is government regulation and societal safety nets, not this, but if one’s government doesn’t fix the problem, there’s not much you can do besides this.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#34

Post by asukhwani »

portman wrote: post #29
andrewingram wrote: post #8

It's a great problem to solve, and killing the payday loan industry is a good thing to do. Out of curiosity, why is the app UI and feature set practically identical to Wagestream (I worked there last year, so i'm pretty familiar with it)?

Sincerest form of flattery. Plenty of room in this market for all players.

Indeed… We think it’s a better way to get paid and we hope that one day everyone will get paid on-demand (worldwide). Let’s make that happen! ;)

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#35

Post by fcaballe »

qnsi wrote: post #30

I worked at a company that was working on this. I left because of ethical reasons. >Workers living from pay check to pay check have traditionally been vulnerable to exploitation And the proposed solution doesn't fix that. Most of those people don't have a problem with unexpected expense once a year. They don't budget and are short on cash every month. So now imagine Bob needs money halfway through the month. He takes…

Hey qnsi!

I am leading BizDev at Payflow, I joined due to ethical reasons & social impact. Happen to be that I am southamerican and pretty familiar with people living paycheck to paycheck.

The reason why they are better off is because we are the only alternative that is free for them: Credit cards, loans, etc are not zero-rate. Far from that a loanshark can charge up to 3000% for a short term loan in LATAM.

We are bringing employers into the game, to actually do something and pay so that their employees get the zero-rate that is so popular for high income workers through their cards or banks.

What reduces your purchasing power is financial expenses, not accessing your money earlier.

We won't solve every money problem, but at least we are solving some and reducing low income workers exposure to predatory finance.

Hope you appreciate my answer, it was 100% sincere. Fede :)

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#36

Post by Grustaf »

asukhwani wrote: post #12
jon-wood wrote: post #7

> We thought employees would use our app because it’s innovative, but they mostly use it because they really need the money. This came as a surprise to us. I'm having real difficulty working out how this could possibly have come as a surprise, of course people are using your pay advance app because they really need the money. Why else would someone take an advance on their pay?

Good point. It would have been more accurate to state that we were surprised at how much people used the app! Over 40% of employees that have access to our app use it! Also, we were surprised by how high user retention is.

Don’t you worry that easy access to credit will exacerbate the problem, leading people ever deeper in depth?

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#37

Post by fcaballe »

prepend wrote: post #23

Isn’t this problem more easily solved by more access to credit cards? It seems like the examples where an advance is needed would be more easily, and even cheaply, solved by using a credit card and repaying on payday. There are instant approval credit cards and low credit limit cards. And credit cards even allow cash advances at 20-30% annually. So, for the example with the gas station customer, using a credit card a…

Almost none low income workers have access to a zero-rate credit card with credit limit available and zero annual fees.

Besides that unpaid balance carries interest.

The idea is to de-risk by bringing their employers into the equation :)

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#38

Post by fcaballe »

smoe wrote: post #20

Since as I understand you are expanding to LatAm, as someone having worked in Colombia for the last 5 years on b2b and b2c tech products for people on the low to mid side of the socio-economic spectrum, some top of mind thoughts. Hope it helps. - Living paycheck to paycheck is a problem, but the underlying cause is more often than not having a job month by month. Even more so since the pandemic. The majority of peopl…

That's amazing insight smoe.

We are indeed aiming for low income worker population in LATAM and your calculus is right:

- Here we see around 50Euros for a salary of 900/1000 so around 5 to 7% of your salary withdrawn.

- We would expect even smaller quantities in LATAM.

App is super lean and accessible by every phone and building trust among our community (users & companies) is key.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#39

Post by asukhwani »

smoe wrote: post #20

Since as I understand you are expanding to LatAm, as someone having worked in Colombia for the last 5 years on b2b and b2c tech products for people on the low to mid side of the socio-economic spectrum, some top of mind thoughts. Hope it helps. - Living paycheck to paycheck is a problem, but the underlying cause is more often than not having a job month by month. Even more so since the pandemic. The majority of peopl…

Thanks a lot for sharing these learnings. We will keep them on our radar. Sure, would be great to chat!

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#40

Post by asukhwani »

jkhdigital wrote: post #24
prepend wrote: post #23

Isn’t this problem more easily solved by more access to credit cards? It seems like the examples where an advance is needed would be more easily, and even cheaply, solved by using a credit card and repaying on payday. There are instant approval credit cards and low credit limit cards. And credit cards even allow cash advances at 20-30% annually. So, for the example with the gas station customer, using a credit card a…

The difference, I think, is that the credit card model is an unsecured loan while Payflow seems more like receivables financing. Big difference in the perceived risk exposure.

Exactly, the risk is the first big difference. With Payflow, you can never spend more than you have already earned.

The second thing is most blue-collar workers in most countries can’t get credit cards at all.

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