Online Lenders

Monzo has 200,000 people using its salary advance feature

  • Challenger banks are going after their users' paychecks.
  • In return for setting up direct deposit, firms like Monzo enable users to get paid early.
Monzo has 200,000 people using its salary advance feature

Challenger bank Monzo now has 200,000 customers using the app to get paid a day early.

  • After launching its salary advance feature in August of 2019, £687 million has been claimed early by 183,000 customers, with a quarter taking more than £1,000.
  • Salary advance, popular with many of the challenger banks, enable users who have direct deposit set up for their wages, to get paid a day to a few days earlier than the usual pay cycle.
  • Challenger banks want to become the primary banks for their customers. One way to do that is to go after their clients’ salary deposits. In return for setting up direct deposit, some challenger banks offer salary advance functionality. 
  • While firms like Monzo have this built into their apps, there are standalone firms that provide salary advance-type functionality, including PayActiv, Earnin, and Even.
  • These stand-alone firms have raised hundreds of millions of dollars in venture capital by some of the best firms.

A growing trend among large enterprises is to provide some sort of salary advance options to their employees, especially for hourly workers.

  • Salary advance firms employ different revenue models — from free, to subscription, to tips, to fees. 
  • These different models, some more opaque than others, make it hard for users to impute the total cost of these loans.
  • Some of these firms have been accused of dressing up payday loans in fintech clothing , charging usurious rates, and have been sued.
  • It’s not only high rates that have people’s attention. There is growing concern that salary advance perpetuates a cycle of debt that makes it hard for consumers to get out.
Online Lenders

CIT revamps B2B point-of-sale lending platform

  • CIT upgrades its point of sale system to accelerate purchase finance.
  • The company rolls out APIs to ease integration.
Michael Deleon | February 17, 2020
Online Lenders

4 charts that show just how big a deal student debt is

  • Student debt hit historical highs in 2019 with $1.5 trillion in outstanding loans.
  • A new survey by Pillar asked people just how far they'd go to get rid of their loans.
Zoe Murphy | January 22, 2020
Online Lenders

Kabbage partners with GoDaddy to offer capital to entrepreneurs and SMBs

  • Kabbage uses a partnership strategy to pursue growth.
  • This tie-up gives the SMB lender access to GoDaddy's US clients.
Michael Deleon | November 04, 2019
Online Lenders

Behind a rebrand and a new marketplace, SMB lending marketplace Become shuns telephone sales in favor of a full digital experience

  • Become, previously Lending Express, offers an entirely end to end digital lending process for SMBs.
  • The company also announced a $12.5 million investment round.
Zack Miller | October 29, 2019
Online Lenders

‘Like Visa for B2B’: Fundbox raises $176 million and hits $1.5 billion in SMB originations

  • Fundbox hits a major lending milestone to SMBs.
  • The company feels it has a big runway for growth.
Zoe Murphy | September 24, 2019
More Articles