Phuthi Mahanyele-Dabengwa, CEO of Naspers in South Africa.
Naspers, through its R1.4 billion early-stage technology investment vehicle Naspers Foundry, announced an investment of R15 million ($1 million) in Floatpays, an on-demand earned wage access platform that helps clients develop financial well-being.
Floatpays gives customers real-time access to a portion of their earned but not yet paid income at any time during the month, giving them an alternative to using credit to cover unplanned expenses.
This is Naspers Foundry’s third fintech investment and its ninth transaction since its launch in 2019.
According to Naspers, Floatpays’ vision is to enable customers to achieve financial wellness by moving from debt to savings, through better access to their earnings, budgets and financial awareness.
He notes that Floatpays’ technology integrates with a company’s existing payroll system, allowing employees to access a portion of their earned pay at any time during the pay cycle.
Floatpays, which was founded in 2019, helps customers reduce their reliance on debt, start saving and gain skills to better manage their money, the company says.
It explains that the solution can reduce financial stress, help employees avoid costly credit, payday lenders and loans from family or friends when they need funds to make payday.
Naspers adds that Floatpays also helps employers, allowing them to help their employees build financial well-being.
The Floatpays solution for employees is available on smartphones and with features via an app on iOS, Android or by USSD. Employees can access their withdrawals through Floatpays instant money coupons and electronic funds transfers.
Employees can use their earned wages to purchase life essentials such as prepaid vouchers for mobile data, airtime, electricity, or health care through the app or USSD.
Phuthi Mahanyele-Dabengwa, CEO of Naspers in South Africa, comments: “We are excited to invest in and support Floatpays in their goal of helping people avoid debt and supporting South Africans during these tough economic times. Financial inclusion is important to us as it is well aligned with our purpose of using technology to improve people’s daily lives and our commitment to help our country towards economic recovery.”
Fabian Whate, head of Naspers Foundry, says: “Access to earned wages on demand is growing rapidly within the fintech sector. While still nascent in South Africa, there is significant potential for Floatpays, which focuses on serving the unbanked. We are delighted to be partnering with the team at Floatpays, who have a proven track record of success in early-stage technology businesses, particularly fintech.”
Simon Ward, Founder and CEO of Floatpays, says: “We appreciate the support and partnership with Naspers Foundry which will enable us to deliver on our vision of enabling South Africans to achieve financial well-being.
“Floatpays gives ordinary people much-needed access to funds and a growing set of other financial services, fostering a more productive and healthier workforce with greater financial security.”
According to Naspers, more than a quarter of customers sampled in the 2021 Wellness Warehouse case study said they were able to avoid payday loans because of the earned wage access platform.
The same study reported that 88% of users said they were better off financially after using the platform, it concludes.