We always like to hear about new ways for small businesses and their employees to benefit from the ever-mounting force of new cloud technology. Last week we learned about Clair. It’s an earned wage access provider that’s teaming up with Mastercard, a long-time partner to small business owners.
Clair’s platform helps small business employees get paid on their own timelines. That might be daily, weekly, semi-weekly, or monthly. That’s a powerful option in particular for the millions of gig and hourly workers. Clair is in the early stages of its development, raising just under $5 million to date. We’d expect that amount to increase considerably as 2021 marches on. And in particular, once the partnership with Mastercard begins to pay dividends.
Partnering with Mastercard is clearly a motivation for the team at Clair. By undertaking some necessary platform upgrades and becoming its own program manager, the company is better positioned than ever before. Clair’s co-founder and CEO Nico Simko had this to say. “This streamlines the relationship with Mastercard, lowers our costs, gives us greater control, and allows us to offer white-labeled solutions to employers and payroll providers who want branded products.”
The Anti-Payday-Lending Platform
What Clair does is in many ways the opposite of payday lending. Instead of paying huge interest rates, workers who sign up to use Clair’s earned wage access services are given a checking account and a debit Mastercard. Clair doesn’t charge transaction or membership fees. And the funds are instantly available.
Clair works directly with employers, as well as human capital management firms and gig worker platforms. Clair makes money when the workers use their debit cards to pay for important daily purchases. By gaining access to their earned money sooner, employees can better time their need for money with their need to pay for things. Like rent. In many cases, cardholders can receive instant access to their funds by using their mobile wallets. This is a big deal For the estimated 82 million non-exempt workers. And it lets small business owners empower their employees to decide how they get paid.
Strengthening the Economy’s Backbone
CEO Simko said this. “Hourly workers are the backbone of our economy –– they shouldn’t have to wait two weeks to get paid, or face eye-watering fees to get advances or loans . . . by partnering with Mastercard, who shares our mission to make financial products accessible, we’re working to transform the financial wellbeing of America’s hourly workers and giving them the tools they need to build brighter futures.”
“We’re pleased to see Clair through this next phase of growth with this new offering and look forward to our continued partnership to meet the needs of the hourly worker segment through flexible and innovative payments technology,” said Sherri Haymond, executive vice president, Digital Partnerships at Mastercard.
I don’t know about you but when I was washing dishes at the Little Spaghetti Factory on Santa Monica Blvd. in West Los Angeles in my youth, I sure could have used access to my wages before that magical payday. Here’s hoping Clair has tons of success. It sure beats what payday lenders have done to America’s hourly workers.