With a vision to eliminate the payday poverty cycle, SmartWage assists in giving employees access to a portion of their earnings in real-time, and in doing so promoting financial control, encouraging saving and decreasing debt.
We chat to Nick Platt, co-founder of SmartWage, to find out more about the startup changing the way people get paid...
SmartWage gives employees access to their salaries and wages as they have earned them. We help employers by taking on the administrative burden of giving employees advances, freeing up cash flow, improving productivity and giving employees a better way to access what they have earned.
We’re on a mission to eradicate payday loans whilst at the same time helping educate people about managing their money. We do this through access to your earnings, and through leveraging incentives to increase financial education. This promotes financial control, encourages saving and helps hard-working people avoid incurring unnecessary debt.
Simon Ellis, one of our co-founders, lives in the UK and had a friend who worked at a VC who was working on what she called ‘the most exciting social impact round the firm had ever been involved in’. The company was Wagestream, who ended up raising the UK’s largest-ever social impact investment round in 2019 (£42m).
He asked himself why this wasn’t in Africa or South Africa. When we knew there was a gap in the market we decided to go for it. After reaching out to just a few employers who absolutely loved the idea, we knew we were onto something.
The SmartWage idea was born in September 2019 and we launched in February 2020.
SmartWage gives employees access to their salaries and wages as they have earned them. If you’ve worked for five days, you should be able to access what you’ve earned for those five days of work.
We help employers by taking on the administrative burden of giving employees advances, freeing up cash flow, improving productivity and giving employees a better way to access their salaries and wages.
What are some of the services you are offering?Our core service is to help people access what they have earned. We’re changing the way people access their salary, and the way people get paid.
Traditionally, our service has an associated transaction fee, but due to Covid-19, we have offered our services (to existing and new customers) for free since the beginning of April and will continue to do so until the end of June, as a gesture of support to our customers.
We have also partnered with Yoco on their Support Small campaign to make our services more widely available to their network of 80 000+ merchants, a community of companies that are predominantly in the retail sector and have been hardest hit by the impact of the lockdown.
Another exciting offering we rolled out was an adapted version of our solution with Clanstival, an online interactive digital festival, in which we worked with the event organiser to provide artists with an early distribution of the festival’s proceeds to alleviate the increasing financial burden induced by the lockdown.
The biggest obstacle is getting employers and employees alike to understand the solution. It’s a novel concept that's hugely beneficial for both employers and employees yet we have been met with scepticism from people who confuse our solution with payday loans and loan sharks. Overcoming this has required us to rethink our messaging to ensure we communicate it’s benefits, and ensure we get the message across that SmartWage is not a loan, but rather an advance on what you have already earned.
From a coronavirus perspective, we are uniquely positioned to assist businesses and employees during the lockdown period, by providing employers with a solution that protects their company’s cash flow while also taking care of their employees, giving them a financial lifeline that prevents them from having to resort to costly and risky alternatives to deal with urgent costs or simply to make ends meet. This has been hard to communicate and it’s been tough to get people to listen to us as most companies are in crisis mode and are not thinking about offering new solutions (even beneficial ones) to their employees.
We are fortunate in that the business was born remotely - the founding team is spread between two countries and many locations and so our internal processes were already well suited to the requirements of working from home.
If anything, the lockdown has presented us with an incredible opportunity and we have been busier than ever during this period. Both of our recent partnerships with Yoco and Clanstival were born out of the recognition that our solution is ideally suited to assist businesses and their employees during, particularly difficult times.
That being said though, Covid-19 and the lockdown have almost completely defined our journey thus far - there isn’t much of a ‘before’ for us to use as a frame of reference.
We are taking this as a positive, in the belief that on the other side we will be better adapted than most to the ‘new normal’.
What advice would you give to other aspiring entrepreneurs?Think less and do more - don’t get bogged down trying to formulate the perfect solution and provide for every eventuality. You’ll never be able to do this in any case and attempting to do so is often an excuse for not taking action. This has been the biggest lesson of the startup experience for me. Putting yourself out there, even if it’s scary (which will be often), taking action and getting that crucial customer feedback loop going is probably the most important thing you can do.
As cliche as it sounds, you’ll never improve if you don’t try, fail and learn your lessons from those failures. “Perfection is the enemy of progress.”
Starting a business, from a practical perspective, is becoming easier all the time, even in countries where the business or regulatory environment is not totally conducive to entrepreneurship and innovation.
It is becoming easier and cheaper to access the knowledge, technology and resources needed to turn an idea into reality. This will hopefully lead to exciting growth of innovative and game-changing ideas getting to market, often from unexpected places.
Another exciting trend we’re seeing in entrepreneurship across the world is a shift towards more mission-driven and responsible, shared value creation for all stakeholders (and the environment), rather than pure profit motives, with many entrepreneurs finding more and more effective ways to combine doing well with doing good!This is certainly what we’re trying to achieve at SmartWage - we would consider our efforts a success not only if we built a sustainable and profitable business, but if all our customers, employees and the communities and societies our solution is embedded in truly benefit from the impact of a less indebted and more financially literate population.
A stronger and much more connected entrepreneurial ecosystem that provides aspiring entrepreneurs with better access to the knowledge, expertise, mentoring and support they need to get their ideas off the ground. There are encouraging signs of this already taking place, but I believe there is still a long way to go in this regard. There are so many good ideas and capable people out there that don’t see the light of day because the environment is not conducive or they simply slip through the cracks.
An environment where entrepreneurship is not only supported but encouraged at all levels of society would be one of the most powerful antidotes to our current social and economic woes.
Where would you like to see SmartWage in the next 5 years?In five years time, we hope to be servicing at least one million registered users in South Africa and have expanded our solution across sub-Saharan Africa.
