PAYMENOW: Financial Peace of Mind for Everyone, Everywhere
PRODUCTION: Eleanor Sarbutt-King
Rugby World Cup-winning South African winger Bryan Habana put his reputation on the line when he co-founded financial wellness company Paymenow in 2019. A technology offering that allows for earned wage access for Southern African and African employees, Paymenow is quickly becoming recognised as an innovative fintech business solving real problems. Habana takes Enterprise Africa through the challenges and opportunities for this exciting, agile venture.
Speaking to Paymenow Chief Client Officer, Bryan Habana about the successful fintech he has built with his team over the past three and a half years, there is a reminder that when you’re passionate about something, you don’t have to remember lines.
He knows about being publicly scrutinised, he has experienced media attention, he has been forced to speak publicly – not always about easy topics.
But when he talks on Paymenow, he doesn’t read a script, he doesn’t use distractive marketing jargon – he lights up with enthusiasm and gets quickly to the point.
“We are trying to make people’s lives better, and the way our technology does that is great.”
A former Springbok, Habana is a habitual winner who knows about great victories. But in just over three years at the Stellenbosch HQ of Paymenow, he has arguably achieved more than he did in 15 years as SA’s rugby poster boy.
Paymenow is a financial wellness provision, allowing employees of onboarded organisations to gain access to a portion of their already-earned wages in advance of pay day for a small fee. In South Africa, a monthly salary cycle does simply not fit with so many employees who have to live daily. Emergencies happen, and difficulties can compound. Disrupting responsibly and digitally to help end reliance on payday loans and financial stress, the company provides surety, fairness, and dignity.
“We are grateful to have some phenomenal Paymenow colleagues and we have yet to see someone leave the business – that is exceptional. The way we have organically grown and the way we have built in a startup environment has been extremely positive,” says Habana, someone who knows about teamwork, demonstrated by the 2007 Rugby World Cup winners medal on his mantlepiece.
TRANSITION
In 2019, Habana’s former university roommate and good friend, Deon Nobrega (Paymenow CEO), approached him with a new concept for a financial health product after realising a need from employees that was not often met by employers. Nobrega had worked in financial services and fintech and had a good network of minds ready to assist. Habana was in transition, finishing rugby and considering what would come next. Flushed with offers, it had to be positive and had to fit in line with his own personal values and ambitions.
“The transition period for professional athletes is a very difficult one. You die a small death because everything you have known for 15 years is no longer. Your salary stops. You have to ask for leave. You have people reporting to you,” he says.
“I was in a limbo environment, doing a lot of ambassadorial and punditry work. I was in Japan for the 2019 World Cup, I was working for, HSBC, MasterCard and Land Rover. I had co-founded a digital sports marketing agency called Retroactive which was still very much a part time thing. When Deon approached me, it was the first time in my transition period that I saw an opportunity to get a ‘real’ job. As a cofounder of an organisation, not only do you have to have a financial contribution, you also have to bring a physical, office-bound contribution.”
But it wasn’t an easy process. In fact, Habana was highly sceptical of the concept. Well known as a predatory, harmful industry, micro and payday lending comes with a very negative stigma. His reputation on the rugby field and his goals as an entrepreneur could not be dragged down by a poor choice. But, earned wage access, he was about to learn, is all but a poor choice and is not in the same category as microlending.
“As soon as potential clients hear of people getting access to money they’ve already earned, they immediately think it’s a rolling credit facility, and people are already overburdened,” he explains.
Nobrega was clear – this is a financial wellness offering. The goal was improving financial inclusivity and understanding – educating those who need it, and helping to build on sound financial habits, without the risk. The idea developed between Nobrega, Habana, and co-founders Willem van Zyl and Gerbrand Potgieter was about creating a platform that was first and foremost responsible but also allowed for growth as a startup.
This, according to Habana, is what sets the company apart.
TRANSPARENT
After developing a basic strategy, Paymenow headed to the UK to learn. The team built an understanding of the mechanics behind the scenes, and created a budget for technology creation and market approach. A key takeaway was that most software was built for first-world markets and nothing existing would suit South Africa’s unique developing market environment.
“We started looking at how we could use it as a gamified, reward-type offering within a financial wellness environment – that gave us a massive differentiator in the market. We built a minimum viable product (MVP) – which I quickly learned does not stand for Most Valuable Player – based on the Discovery Vitality model around physical health but looking at financial health and education. We incorporated all of that into a financial wellness platform that is earned wage access.”
The app-based system ties into HR and accounting at employer level and takes a large burden away from those departments. It speeds up the process for the employee who, typically, when asking for earned wage access is not in a position to wait. The Paymenow product also removes emotional subjectivity as well as cumbersome manual effort from the process and reinforces responsibility across the entire activity.
Proof of good work comes in the form of highly positive feedback from global impact measurement organisation 60 Decibels as well as being included in a global Financial Inclusion organisation’s (The Catalyst Fund) accelerator program in 2020 – the only earned wage access player globally to be associated with an NGO of this calibre.
60 Decibels found that almost all users had never had access to an offering like Paymenow before, and almost all could not find a better alternative. Encouragingly, almost all reported that the system improved quality of life.
“The feedback we get from employees is remarkable,” says Habana. “60 Decibels has taken us through two research cycles already, with a third to come in August. We achieved a Net Promoter score of 74, one of the highest they have ever received. Results highlight information around how this eases people’s ability to access liquidity, how they are getting their dignity back, and how it is improving their overall financial situation, and that is something which we are very proud of. It allows the employer to see the benefit of the wellness offering that they are bringing to the employee in its totality. We play an impactful role in that holistic approach.
“As a financial wellness offering, Paymenow cannot be seen as a standalone silver bullet. It has to be seen as part of a holistic financial wellness offering that is delivered by employers. It is a tool that gives people dignity back.”
‘THANK YOU’
Beyond research report scorecards and surveys, real interactions have confirmed that Habana’s choice to enter the market was the right one. He says that the journey has been fraught with challenges, but these pale into insignificance when clients detail their experience with Paymenow.
“We were on a client visit in Pretoria,” he describes. “We were at a local restaurant for a prospective client meeting and I went to the public bathroom. There was a guy cleaning the toilets and he was contracted by a company who had rolled out Paymenow. I saw his badge; I asked him about the company and if he had heard of Paymenow. His facial expression changed and the first words that he said were ‘thank you’. I was a little confused. He said: ‘thank you for giving me my dignity’. Without Paymenow, he had no option. It had positively changed his life. I thought about this incredible impact, and I thought about a lot of things I have achieved from a sporting perspective but being able to see how what we do pays dividends to the end user was absolutely incredible.”
This is just one human example of innovation disrupting an environment that has been crying out for an alternative. By making the app data free, charging zero fees on value-added in app voucher purchases for necessity items, increasing financial literacy, enabling users to save money, improve their credit scores and receive financial and mental counselling at no extra charge, the end user of Paymenow is always at the forefront of thinking.
“Everywhere you go, you see people with companies that engage with Paymenow and there is a resounding positive response, and that is fantastic,” Habana smiles.
“JP Morgan did a case study with some of our anonymous data last year, taking a very agnostic, unbiased rating from a credit score perspective and used that as a comparison against people without access to earned wage access. We saw a remarkable improvement in people’s credit score against those without that access.”
He adds that clients have conducted interviews with potential employees who actively ask about the potential for earned wage access, alongside other financial wellness prospects. Here, Paymenow is helping clients to attract and retain dedicated personnel.
“It creates a positive environment where employees feel they are being empowered by employers, and that is incredible. One of the major considerations in the case studies we have done is that financial aspect – if employees are sitting at work but worrying about their financial struggles, that compounds and impacts their ability to do their work.”
Employers that genuinely care and want to make a difference in the lives of employees must understand the multi culture environments in which employees operate – not always easy.
“The biggest thing for us was the market education,” admits Habana. “When you talk to executives, they look through the lens with a different mindset. We always say that if you, as an employer, have never got on a train, taxi or bus, or if you don’t have to worry about needing airtime thanks to your monthly cell phone contract – how can you understand employees who do? That changes a lot of minds.”
Because of the proven benefits of Paymenow, and the company’s sterling reputation, competitors are busy planning entry to South Africa’s earned wage access industry. For Paymenow, the focus is only on what can be controlled.
“We have 250,000 employees with access to the platform and we have signed up some big blue-chip organisations,” highlights Habana, adding that earned wage access is here to stay with big companies seeing it as a big benefit.
“We have been working with the Foschini Group for two years. They are an incredible organisation with employees at the centre of their decision-making processes. Boxer Group, Cotton On, WNS, and more have joined the platform, typically those that are very employee-centric and want to add value to the end user.”
MACROECONOMIC AWARE
Partnering with like-minded organisations has been tough for Paymenow. Even with Habana’s celebrity-pull, the business environment in South Africa remains difficult. The ongoing energy crisis combined with a plummeting Rand v Dollar, and general uncertainty about what will go wrong next makes for a tough climate in which to predict growth.
Aware of the challenge, Paymenow has designed each step in the customer journey with problematic conditions in mind.
“You cannot go into any form of business without looking at the macro-economic environment. For us, a lot of the decisions have been based around the end user, whether from a poverty tax perspective or financial exclusion,” says Habana.
This, he says, is why financial wellness, supported by all the benefits and features offered by Paymenow – such as being data free – is at the core of the entire offering. Currently, the country is expected to miss most growth targets and expand by just 1.1% in 2023, down from 1.7% in 2022. Unemployment stats remain unacceptably high (33%) and this contributes to cash-based financial instability that Paymenow hopes to address in the long-term.
“When we started, we looked at people in the blue-collar work environment and found that they typically buy R3.70 worth of airtime and data every three days. We didn’t want that to be a barrier to entry so we made the app data free – a cost that we carry. We included value-added services from various providers where we give people the ability to access airtime, data, electricity, food, pre-paid medical vouchers and more with zero fees. We don’t want those that get taxed the most to be burdened the most, and that gives a good story for the employer. We have added an employee assistance programme wellness (EAP) support line. We are not a financial wellness specialist and so being able to further offer that from a holistic wellness perspective around financial, mental, debt structuring through access to a dedicated WhatsApp line is very useful, and almost better than a private banker. Now, access to money comes with support and help through the click of a button,” details Habana.
As part of the Paymenow offering, there is also access to an Allan Gray interest-bearing money market savings account which is not something most employees would benefit from without Paymenow. “We have made decisions based on macro-economic structure and micro-economic details where we can aptly ensure we deliver a platform that allows people to be financially educated and included,” Habana furthers.
Again, the results speak for themselves. Data shows that financial responsibility is quickly improved when working within the parameters of an earned wage access system that is centred around financial wellness.
“We can share lot of data,” explains Habana, of the initial pitch with nervous employers who may have moved these initiatives down the priority list during tough times. “We have completed four million transactions on the platform and we can explain that even when people are given access to 25% of the already earned wages, they are only using 12% because they know it is their own money and that it is salary deductive – they quickly become responsible. Compared to a payday loan, there is no ducking and diving.”
SUSTAINABLE GROWTH
After starting out in business just before the pandemic and its ensuant disasters, Paymenow has always been focused on growth in tough times. The company launched with its first client just a week before lockdowns came into place. Now, with more than three years and a quickly growing number of transactions under its belt, the team behind Paymenow is looking forward with optimism.
“We started out as four guys in a small office,” remembers Habana. “We are now 30 people with 15 more as part of the network. We are processing more than 350,000 transactions per month compared to March 2020 where we processed 81. In October 2020, we celebrated wildly when we processed 100 transactions in a day.”
Since inception, the company has moved into new geographies including Namibia, Zambia, Lesotho, and eSwatini. This expansion has come from three factors that others cannot replicate: amazing relationships with clients, scalable technology, and strong backing from shareholders.
“I was wet behind the ears” smiles Habana, “and our CEO put in a lot of the foundations to make sure we were legally compliant and technologically compliant. Building scalable tech was important, but building tech with the appropriate compliance was even more important as we readied for corporate South Africa.”
A trait he has had to learn has been the requirement for constant pivoting. With earned wage access available in some form in almost all countries around the world, the company has had to be nimble in its approach to ensure sustainability. “You must stay ahead of the curve and understand where growth is happening,” he states. “The scalability of our tech and the proven data in other jurisdictions has made us the leader of the pack and that is something we are incredibly proud of.”
Despite challenges in South Africa, industry-leading status has opened new doors for the company, and Habana and team are certain that there remains major prospects. He highlights the issue of lacking public transport as a major driver of growth. Without an efficient bus or train system in most metros, many still rely on taxis to commute. This requires cash up front. “We believe that the South African market will take our focus for some time, but given the fact that there are common currency zones, there are big opportunities. There are big and quickly growing economies in Africa where we have learnings, and others where we have some multinational clients with a base,” he says of sub-Saharan Africa which has better prospects than South Africa alone, expecting GDP growth of 4.2% after 2024 for the rest of the decade.
“We have to look at the size of the formally employed market – that dictates how big an opportunity is. We have to understand how we can fund it, and we have to make sure we can scale,” he says of growth in new nations.
APPETITE FOR WINNING
As the company scales and hits the radar of more employers, banks, and other financial institutions, there is a clear strategy and goal in place which will help Paymenow to be single-minded in its drive.
“We are only concerned about growth and continuing to improve our product offering while being sustainable,” affirms Habana.
“We have an audacious goal of one million people having access to Paymenow in three to five years. However, you cannot put yourself at massive risk – you have to be strategic and you have to have the right network to enter the market.”
Alongside its shareholder, using its growing reputation, and with Habana passionately leading from the front, this financial wellness offering will continue on its mission of restoring people’s dignity and building sustainable financial inclusion in Africa.
“In corporate, there is a lot of opportunity for winning. We always want to be a leader of the pack and my affection for wanting to be at the top remains,” he says. “Our service delivery is one of our USPs, and the manner in which we engage with employers and employees is exceptionally key for us. We remain positive, but conservative. Having a feel-good story discussion while focusing on bottom line profitability is important.”
Personally, Habana is excited about all that has been achieved so far, but he is clearly enthused about what is still to come. “I am still far from where I want to be in my life five years after retiring from rugby. A pro athlete knows how to work hard, sacrifice, dedicate themselves, and communicate. On a rugby field, I was with 14 other CEOs – they were the best of the best. In business, you have to communicate in a totally different way.”
Evidently, he has been successful. Paymenow was the winner of the 2022 World Summit Award for Business and Commerce and is already making progress with its long-term vision of changing a vicious debt cycle into a savings mindset while turning employees into financially resilient citizens.
“It has been tough – we have made mistakes, the tech stuffs up, we have vigorous inhouse debates, but we wanted to get to bottom line gross profit and that is what we have all aimed for. Now we want to grow and scale appropriately,” he concludes.
