Phuthi Mahanyele-Dabengwa, South Africa CEO of Naspers.
Naspers, through its R1.4 billion early-stage tech investment vehicle Naspers Foundry, announced a R15 million (US$1 million) investment in Floatpays, an on-demand earned wage access platform that helps customers do this to build financial well-being.
Floatpays offers customers real-time access to a portion of their earned but unpaid 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 ninth transaction since its inception in 2019.
According to Naspers, Floatpays’ vision is to help customers achieve financial well-being by moving from debt to savings through improved access to their earnings, budgeting and financial awareness.
It notes that Floatpays’ technology integrates with a company’s existing payroll system, allowing employees to access a portion of their earned payroll at any time during the payroll cycle.
Founded in 2019, Floatpays helps customers reduce their dependency on debt, start saving and gain skills to better manage their money, the company says.
It explains that the solution can reduce financial stress by helping employees avoid expensive loans, payday loans, and borrowing from family or friends when they need money to make it to payday.
Naspers adds that Floatpays also helps employers by enabling them to help their employees build financial well-being.
The Floatpays solution for employees is available on smart and feature phones via an app for iOS, Android or via USSD. Employees can access their withdrawals via Floatpays instant money vouchers and electronic funds transfers.
Employees can use their earned salary to buy essentials like prepaid cellular data vouchers, airtime, electricity or medical supplies through the app or USSD.
Phuthi Mahanyele-Dabengwa, Naspers CEO for South Africa, comments: “We are delighted to invest in Floatpays and support it in its goal of helping people avoid debt and supporting South Africans during these difficult economic times. Financial inclusion is important to us as it aligns well with our purpose of using technology to improve people’s everyday lives and our commitment to help our country’s economic recovery.”
Fabian Whate, Head of Naspers Foundry, says: “Access to earned wages on demand is growing rapidly in the fintech sector. Although still nascent in South Africa, there is significant potential for floatpays focused on serving the underbanked. We are excited to partner with the Floatpays team who have a proven track record in early technology companies, particularly in the fintech space.”
Simon Ward, Founder and CEO of Floatpays, says: “We welcome the support and partnership with Naspers Foundry, which will enable us to realize our vision of helping South Africans achieve financial prosperity.
“Floatpays provides ordinary people with much-needed access to funds and a growing array of other financial services, fostering a more productive, healthier, and financially secure workforce.”
According to Naspers, more than a quarter of customers surveyed in the 2021 Wellness Warehouse case study said they were able to avoid payday loans because of the earned wages access platform.
The same study reported that 88% of users said they felt better financially after using the platform, the conclusion states.