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Clair secures USD 175 mln to offer on-demand pay solution by Pathward

Tuesday 11 July 2023 10:28 CET | News

US-based fintech Clair has raised USD 175 million in funding to launch an on-demand pay solution as a consumer lending programme backed by Pathward bank.

 

The new programme provides for a participation amount of up to USD 150 million, which allows front-line workers to take wage advances from Pathward. Through the partnership, consumers get access to Pathward’s established FDIC-insured Clair Spending and Savings Accounts, among other financial services.

US-based fintech Clair has raised USD 175 million in funding to launch an on-demand pay solution as a consumer lending programme backed by Pathward bank.

A free way for workers get paid in advance

Clair will use the new funding to expand its team and accelerate adoption, especially among the 76 million hourly workers who represent 56% of the US workforce. Through integrations with platforms like TCP Software’s Humanity Scheduling, When I Work, Gusto Embedded, and 7shifts, Clair is already helping more than 50,000 workers get paid as soon as they finish their shifts, instead of waiting weeks for a paycheck – with zero fees. Clair’s mobile banking app enables mainly millennial and Gen Z customers to avoid paying USD 15 million a year in overdraft fees, and using payday lenders that can charge more than 600% APR.

Small and large businesses have embraced this solution amid the front-line worker shortage, with 4 million more job openings than people to fill them, as they’re seeking unique benefits to attract and keep employees. Companies using Clair to provide earned wage advances to employees include EverView, Viking Ranges, and SanStone Health & Rehabilitation, along with franchisees of DoubleTree by Hilton, Sheraton Hotels & Resorts, and GNC. This is a tool that may give employers an edge in attracting and retaining talent despite the worker shortage.

Additional benefits of using Clair’s services

Clair also announced the launch of Clair for Employers, a set of free, holistic financial wellness benefits for employees of businesses that are not on Clair’s partner platforms. Offering an on-demand pay benefit usually means human resources teams must commit significant time and resources to implement and manage it, but Clair for Employers integrates seamlessly with companies’ payroll providers for free. The integration does not require ongoing maintenance and is fully compliant. Employees of companies using Clair for Employers also can access additional features in their Clair Spending Account, including 3% cash back on gas and groceries purchased on their Clair Debit Mastercard.

Claire’s officials said that front-line workers are underserved, as big banks don’t see them as profit drivers and aren’t building the solutions they need. This lack of support is unfair when half of Americans live paycheck to paycheck and don’t have USD 500 in savings for an emergency, so timely pay is crucial for them to keep up with their bills. They’re happy to join forces with investors, partners, and employers who believe in their mission of enabling people to responsibly customise their pay cycles to their needs.

Representatives from Pathward added that through their Banking-as-a-Service solutions and strong risk and compliance framework, they’re proud to be their bank partner, supporting their issuing and lending needs to meet the evolving demands of their growing business.


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Keywords: funding, partnership, financial inclusion, BaaS, on-demand apps
Categories: Banking & Fintech
Companies: Clair, Pathward
Countries: United States
This article is part of category

Banking & Fintech

Clair

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Pathward

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