Nigeria’s HR-tech Earnipay Raises $4M To Enable On Demand Salary Access To Employees

One of the most common factors that reduce staff productivity is usually the low payment of salary or lack of access to funds when in dire need of it. Having observed that staff low productivity will be a great challenge to achieving set organizational goals, Nigerian Fintech company Earnipay has raised a sum of $4M to increase employees’ productivity. With this initiative, they plan to enable on-demand salary access to employees in the country. Earnipay plans to use the funds raised to export the platform regionally and to target large enterprises.

The platform is catered to employees who seek to earn weekly or biweekly salaries. According to the founder and CEO of Earnipay Mr. Nonso Onwuzulike, he stated the reasons that triggered him to adopt this initiative. In his words, “I was paying my employees once a month, and it didn’t make sense to them, they ended up not being productive because they had money issues, it led to attrition and retention issues for me, because these were guys who are used to getting paid immediately”.

He also stated that the monthly payment cycle is a tough arrangement for people who earn less income. Before Earnipay came into existence, his prior experience as a founder of Removal, Ghana-based recycling revealed a different side of the employee’s needs and preferences, which is the weekly/biweekly salaries. He then sought out a solution to help eliminate low staff productivity, by shifting the payment from monthly to weekly/biweekly payment.

Earnipay is currently integrated with companies’ existing payroll or HRM system and employees can now withdraw their salaries daily with a limit set by companies depending on their monthly salaries. Earnipay charged employees #250 for withdrawals of #2,000($4) to #10,000($20) and #500($1) from #10,000 to #50,000($100). It offers two options for companies for reimbursement, they can be paid on behalf of Earnipay before the end of month reimbursement, or an automatic reimbursement schedule can be set from the reconciliation account on top of employees’ salary accounts.

With so many remarkable achievements by Fintech companies lately in Nigeria, permit me to say that Fintech companies in Nigeria are currently on steroids. Discovering this initiative by Earnipay, I feel very ecstatic because truth be told, having to wait till month-end before receiving payment is usually a tough one, especially for low-income earners. Considering the daily life cost demands, it has never been easy for most employees. According to a survey, 80% of employees in the formal sector preferred flexible access to their salaries. Life is full of uncertainty, anything can happen at any time, such as one having an emergency case that needs urgent money to handle.

Now imagine if such a person just got into a new month, this means that even though he or she is working they will have to wait till month end before such a case can be properly handled which might be too late, tragic! I will suggest that all companies both in the formal and non-formal sectors adopt a weekly/biweekly payment system. It not only increases employees’ productivity but also helps them solve urgent financial issues. There needs to be a change in employee payment structure. Flexible pay options help employees feel less financial stress because, without flexible pay, they are usually concerned about a lack of funds that could distract them from work.

Rather than lose employees completely to the world of freelance and gig opportunities where payment is flexible, a company can compete with the immediate gratification that employees get from working with them by offering the same payment options. Doing so may help to channel the employee’s skills and focus on their primary job rather than having diverted attention. Flexible payment can also drive greater retention by bolstering an employee’s sense of loyalty to their primary employer.

—Press Release —

Earnipay, a financial technology solution that provides flexible and on-demand salary access to income-earners, has closed a Seed round of $4million led by Canaan and with participation from XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital and Paystack CEO Shola Akinlade. Targeting employees across Africa, Earnipay officially launched its operations in January 2022, having been in development and beta testing since September 2021.

Founded by Nonso Onwuzulike to improve the financial well-being of employees, Earnipay uses its technology to offer employees the opportunity to access their earned salaries into their accounts flexibly, in real-time and interest-free. Earnipay partners with employers and seamlessly integrates with their payroll systems to offer its services to employees, who can then track and withdraw their accrued salaries via the app. Businesses are able to have complete oversight and set limits for the percentage of salaries employees can withdraw each month. Since operating in beta, Earnipay has served over 20 businesses, outsourcing firms and HR solution providers in Nigeria including Eden Life and Thrive Agric, whose employees have used the app to access their salary over 1,000 times, indicating a strong demand for the solution.

With the Seed funding, Earnipay will accelerate the development of its technology platform to serve large enterprise employers. By doing so, Earnipay will provide employees with the tools they need to make better financial decisions and improve their quality of life. The company plans to offer its on-demand salary solution to 200,000 employees by the end of 2022.

Speaking on the funding round and the recent launch of Earnipay, CEO Nonso Onwuzulike, says, “Financial worries are the leading cause of distractions in the workplace. The monthly pay cycle means employees are often unable to afford daily expenses, cover emergencies or take advantage of immediate financial opportunities. As a result, they become exposed to predatory payday loans and get stuck in unending debt cycles with unrealistic payback periods and expensive interest rates. Earnipay exists to address this problem and offer an ethical alternative to instant salary access while helping employers improve employee engagement and retention at zero cost to their business. The future of salary is on-demand, and we’re excited to be pioneering this amazing solution in Africa. I’m delighted to be collaborating with a group of highly respected investors who understand the need for a platform such as Earnipay to drive better access to salaries, and, importantly, to improve the financial well-being of income-earners in Africa.”

“We’ve seen earned wage access grow rapidly in many markets and believe it’s a natural fit in Africa,” said Brendan Dickinson, partner at Canaan. “Earnipay has quickly established itself with a product built specifically for the payroll behaviours of this region, and early employer uptake is very strong. Nonso has built one of the strongest teams that we’ve met on the entire continent, and we’re thrilled for the opportunity to partner with them.”

On-demand salary access is a huge opportunity in Africa, with over 70% of Africa’s workforce (500 million people) paid every 30 days and are living paycheck to paycheck. The 30-days pay cycle has led to 40% of the workforce living in an unending debt cycle as they struggle to match their income to their daily expenses, emergencies and opportunities. African businesses struggle to provide scalable solutions for employees to access their daily salaries as they work for it due to legacy payroll process, lack of available cash flow and internal salary advance that remains to be a tedious and manual affair.

Earnipay charges employees a small processing fee of NGN250 or NGN500 for this access. There is no payback and no interest charge because employees are accessing what they have worked for, It’s their money. With Earnipay, employers offer more financial well-being support to their employees, which in turn enables them to attract and retain top talent in an increasingly competitive employment market. In addition to on-demand salary, Earnipay provides financial education for employees to improve their financial literacy with a goal to enable them to make better financial decisions.

Onwuzulike concludes: “For five months, we have been working collaboratively with employers to deliver a workplace benefit that solves the biggest source of stress and distraction in the workplace: employee money issues. By doing so, employers are improving employee engagement and productivity, as well as positioning themselves as a better place to work. We are systematically addressing the inefficiencies in how the African workforce interacts with salaries and will continue to build products and services with both employers and employees in mind.”