It’s not the first foray Greensill has made into the space. Last October it acquired FreeUp, a London based business with a similar offering to Earnd.
It’s a natural move for the business, which sees no difference between their core line of business – helping suppliers access early funds – and employees, who are effectively time and skill suppliers to their employers.
In just a short space of time, Earnd has built up a solid and steady base of reputable clients, including local Fintech Tyro, payroll platform Ascender and hotel group Adina.
What is most novel about Earnin, is it allows customers to access up to $100 per day at zero cost. Instead of setting a fee for their service, Earnin asks users to tip what they think is fair.
Last March, the unconventional revenue generation approach landed the fintech in hot water, with reports that users who weren’t actively tipping were being subjected to credit restrictions. As a result, regulators launched an investigation, after being concerned the model was essentially a way to evade some of the tough laws that had been implemented to protect consumers from predatory payday lending.
Are wages-on-demand the payday lender ‘wolf in sheep’s clothing’? It’s too soon to say. While we could all do with our hard-earned money a little sooner, chances are many of us don’t truly understand the cost we pay by not being better budgeters. It’s arguable with every dollar that’s easier to access, our financial IQ drops a few points, making us more vulnerable to long term financial health issues. On the flip side, money in our accounts sooner, if invested and saved, is more money in our pocket in the long-term. Something makes me doubt that is how the majority of payroll-on-demand users are using these platforms.
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