|IFS Capital announced that its subsidiary, IFS Capital Assets, has signed an investment agreement to take an undisclosed minority stake in fintech start-up Payd.
Incorporated in 2018 and headquartered in Singapore, Payd offers Earned Wage Access (“EWA”) platform solutions in Singapore and Malaysia.
EWA is a program that empowers employees with easy and on-demand access to their already earned wages without having to wait for the monthly payroll cycle.
IFS Capital (www.ifscapital.com.sg) is a leading financial institution specialising in providing customised financing solutions in Southeast Asia. The Group was incorporated in Singapore in 1987 and has been listed on the Singapore Exchange since July 1993. The Group is part of the Phillip Capital network of companies, with a global presence that provides factoring, leasing and lending services covering individuals, family offices, and corporate and institutional clients across Singapore, Thailand, Malaysia and Indonesia. ECICS Limited, a wholly-owned subsidiary of IFS Capital, also provides bonds and guarantees and general insurance services in Singapore.
Currently, the conventional payday loan is one of the most common methods that some employees use to manage unexpected mid-month expenses.
However, such loans tend to come with high interest rate charges and fees that can be as high as 24% for a two-week loan1.
Based on Singapore’s labour force publication for June 20212, there are a total of 1.2 million working residents in Singapore who can potentially benefit from having access to an EWA program.
Ernst & Young estimated that there was approximately US$1 trillion in accrued wages across OECD countries at any given point in time in 20203, highlighting the relevance of EWA across the world.
The pandemic has accelerated the need for more robust and responsible consumer financial solutions, and EWA is an innovative product to address this growing need.
According to a survey by PYMENTS in the United States, 79% of surveyed workers were more willing to switch to employers who are already offering EWA4 as it demonstrated the willingness of employers to understand the needs of their employees.
With EWA, responsible employers can help their employees address personal credit needs in a seamless manner and protect them against predatory lending practices, achieving higher staff retention and satisfaction.
Recognising the potential of EWA as a socially responsible financial tool for consumers, IFS aims to create greater awareness among employers across Southeast Asia and leverage the platform to bring other important financial products in protection insurance, savings and investment to their workforce.
“We are excited to have the opportunity to invest in the Payd team and accelerate EWA adoption in the Southeast Asian markets. Large and middle-market corporations can think of a well-structured EWA program as an integral pillar of their employee benefits framework. They can positively impact worker productivity, promote retention, and reduce absenteeism, resolving some of employers’ biggest pain points," said Renchun Zeng, CEO of IFS Capital Limited (Singapore).
|“We are honoured to partner with IFS, a leading socially responsible financial services provider,” said Justin Kong, CEO of Payd.
“Together, we aim to improve financial wellbeing and promote financial inclusion among the underserved population across Southeast Asia.”
1 Value Champion ‐ Personal Loan vs Payday Loan: Why You Should Avoid Getting A Payday Loan
2 Ministry of Manpower ‐ Employment Table(s) ‐ Labour Force In Singapore 2021
3 Ernst & Young ‐ On‐Demand Pay: payroll that works for all (https://assets.ey.com/content/dam/ey‐sites/ey‐
4 PYMNTHS.com ‐ Visa Direct Powers Real‐Time Payroll For Frontline Workers