Rain, a financial services provider, announced the attraction of a record volume of investment funds for $ 116 million.
The funding will be used to improve the company’s platform, which allows employers to offer employees on-demand pay or access to wages (EWA). This advantage is also known as streaming income generation. Employees get access to paychecks at the end of the working day, rather than waiting for payday.
The service is free for employers who offer it as a voluntary benefit to employees, who, in turn, pay a small fee each time they withdraw wages. Employees are limited to withdrawing 50% of funds over the payment period to encourage responsible use.
The company claims that its service benefits low-paid employees whose financial condition is influenced by negative factors. The main of these factors in terms of the impact is the global economic downturn.
Nigel Morris, a managing partner and co-founder of QED Investors, who led the funding round, says that currently half of US residents do not have access to cheap and transparent products in the financial services market. This state of affairs, according to him, provokes stress and anxiety in millions of people.
Companies like Rain help level the playing field by allowing hourly workers to access money faster.
EWA, or on-demand payment, is currently gaining popularity. A recent survey in the USA testified that 81% of households with an annual income of more than 100 thousand dollars are interested in this payment format. Almost 80% of employees said that a free EWA would increase their loyalty to the employer. Also, 79% of respondents perceive payment on demand as confirmation of their professional value.
One of the companies capitalizing on this drive for EWA is Oglebay, a resort in West Virginia. The firm started using this system in 2018. Currently, 42% of the resort’s staff use EWA to pay for a wide range of everyday expenses.
At the same time, late payment of wages is a serious problem for American workers. The results of a special study testified that 74% of freelancers receive a salary with a delay. It is known that 16% of respondents receive payments due to them with a delay of up to two months.
Rain’s mission is to provide individuals with individual freedom by providing control over income and finances. The company says it is destroying predatory financial products such as payday loans.
As we have reported earlier, Two Raises $19.4 Million for Global B2B Payments Solution.