In this segment of The Compassionate Capitalist Show™, Karen Rands is joined by Sabina Bhatia, Chief Customer Officer at Payactiv, the champion of Earned Wage Access (EWA) to talk about the impact ‘financial insecurity and well being’ of hourly wage workers have on the profitability and scalability of businesses. EWA is rapidly becoming the #1 way for companies to attract and retain their non-salary employees.   Understanding the impact of turnover and job vacancies, as well as the impact of distracted and anxious employees on quality control and customer experience, is critical to the financial performance of a company and their ability to reach its growth targets for both founders and investors.  

Watch above, listen here, or read below to understand the Financial and Emotional Cost of Living Paycheck to Paycheck and how Earned Wage Access as a retention and recruitment tool will have a direct impact on People, Community, and Profit of your business. 

Karen Rands:

Welcome back to the Compassionate Capitalist show. Of course, I’m Karen Rands and I am excited to be back talking about a core piece of my philosophy and what I teach investors and entrepreneurs when it comes time to building successful corporations that can have an impact on their community and can have a successful exit to create the wealth for those founders and the investors that have invested in that. And it’s not just about creating profit, but it’s about having a purpose-oriented company that enriches the lives of the employees, the customers that they serve, and all of the environment, the way they give back to their community, the impact they have in the world at large. And a big part of that is what my guest is going to talk about today because the company that she represents has really truly been a leader in this space to try to help organizations understand the dynamic of what you look like to the community is a direct result of how your employees feel about working there.

Are they able to give 110% or a 100% to the goals of the organization versus worrying about all the other things that are going on in their lives? And even beyond a pandemic, this is one of those things that has been a problem for a long time and a giant spotlight got shined on it during the pandemic, as we discovered how poorly we treated what was considered essential workers that keep our economy and keep our communities, keep what we live, our lifestyles in the US going forward and really probably across the world.

So let me tell you about my guest. Because I’m very excited to have Sabina Bhatia join us. She is the Chief Customer Officer at Payactiv, P-A-Y A-C-T-I-V and the domain on that is just that Payactiv, so no e at the end, .com. Sabina is an accomplished C-suite leader, a customer champion, without a doubt, we were chatting a little bit before this and I’m sure that passion’s going to come out, tirelessly fighting for the financial wellness of every American worker. As a chief customer officer at Payactiv, she acts as a daily advocate and amplifier for the needs of the thousands of corporate clients and millions of lower income workers. With great passion and focus, Sabina has been instrumental in building the financial strategy of what is called the earned wage access. So we’re going to talk more about that. Earned wage access. From infancy to mainstream adoption as the most important employee wellness benefit of 2022.

Karen Rands:

So we’re going to get into how she became so passionate about this, but I want to say welcome Sabina, welcome to the show.

Sabina Bhatia:

Karen, thank you so much for having me. So excited to be here.

Karen Rands:

Absolutely. And so let’s talk about how you came to your background, how you came to become aware of this issue. Because I know a lot of businesses, a lot of people in general, they’ve known that there’s this wage gap and a wealth gap, but they don’t really understand if you are not living in that space and struggling with that day to day, living paycheck to paycheck, which is really stressful, then it’s hard to really realize that other people do that. And something that you said earlier that you’ll share again, I’m sure, so tell us how did you become aware of this problem and how did you find Payactiv to be so rewarded with the company that’s doing so much?

Sabina Bhatia:

Sure. So going back about 25 years, Karen, I come from the world of Wall Street. I spent a couple of decades as an analyst on Wall Street. So the audience I was serving is very, very different from the audience I serve today. And I’ve been through the [inaudible 00:04:36] crisis, I went through the 2008 crisis, and of course, at the time of 2008, I was a lot older and more aware of what financial instruments can do to our workforce and what it cannot do. And while I was in New York in 2008, I learned the financial stress that people were going through in New York, but the audience was very different. These were my colleagues, these were my bosses and managers and supervisors. I’m not even talking about the 44% of Americans today that are working in the front line of our industries making less than $20 an hour.

So it was so chaotic. And the financial stress seemed like there was no end to it. So I thought it was time for me to explore what else could I do with the knowledge that I had. There was a piece of knowledge that was missing in me and that is what technology can do for good. We want to make sure technology makes a positive impact, as we know it can be used for a negative impact also. But we don’t want to do that. So what I wanted to do was really move back to Silicon Valley, and I lived in Silicon Valley in the past, but I wanted to move back here from New York to California for my next phase of my career because I thought I had gained so much knowledge, but it would be better used here than back in New York.

And so I moved here and I found Payactiv. I joined Payactiv in 2015. The firm started around 2013, 2014 and the responsibility really became from bottom up to build the company. Our one main focus was earned wage access. As those three words say, this is earned wages. This is not a loan, this is not a credit card, this is not a favor that anyone is doing for you, this is not any kind of a loan that an employer is giving to you. All you’re doing is finding the ability to access what you have earned, but not been paid. So that really became the start of Payactiv. And of course we’ve evolved a lot in the last seven, eight years, but that was just beginning.

So that is my background, Karen, and that is what earn wage access and how Payactiv started. But as I always say, what you do is very, very relevant, but how you do it is even more important, Karen. Our mantra has always been to be the business as a force for good. You make an impact on communities, you make an impact on businesses, you make an impact on your people. So we want to see that trifecta impact and we want to be able to quantify that impact. Hence, we became a B Corp. We were already following the rules of B Corp, but we wanted to legitimize that and we became a B Corp more than five years back. And today, and I’ll pause after this, today, our B Corp score is 103.4. Karen, the average score is 53.1. And we have a past mark, which is 80. So we are doing okay. There’s still a lot more to do, but it’s a good start, I would say.

Karen Rands:

Absolutely. So let’s talk about this idea because I think for the investors, the owners of companies that are listening in, they themselves are insulated a lot of times. They might hear stuff on the news, or they might have heard some things that, as a result of the pandemic, about this frontline worker and the essential worker. At some point people were like, “Oh, the essential workers are the people at the hospitals.”

But as we’ve learned from the supply chain, essential workers are the people that to unpack that box and stick it on the shelf, the essential workers are the ones that, they serve you, they check you into the hotel, everything. They’re the ones that clean, they clean the buildings that we work in. They’re the ones that oftentimes you don’t notice them, they’re sort of part of the surrounding of what makes the world go and you have really have no idea. They just do their job so that we can do the things that we do and enjoy the life that we have. And we just don’t oftentimes even understand the struggles that they go through or what we call them to do. And discount it as if because they’re not a brain surgeon or a police officer, they’re not essential in that way, but they are so essential to the fabric of America, it’s amazing.

So share your thoughts about that and the impact that it has in the workforce, in a way that a company runs, and the impact on business if they’re not respecting and treating that level of workers, those people, properly for them to be able to make a living wage and to be able to get access to the money that they need. Because the difference in the wage, they don’t always just pay on the first of the month. They have bills all through that they’re balancing their budget for in order to meet this bill and that bill. So talk about that from your perspective.

Sabina Bhatia:

Simply put, Karen, some days my mood swing is dependent on the experience that I had with one of those 44% of Americans in the frontline of our industries. I leave a coffee shop. Is that person engaged? Who checked me out? Who gave me my coffee? How they made my coffee? Did they take a phone call behind the counter? What is happening in their lives? It was always true, but it felt escalated during the pandemic that you cannot ignore things that are happening in their life outside of work. You cannot ignore that. And if companies want to provide a true financial wellness, it needs to be wellness overall.

So the way I look at it is, think about the pandemic. There were two different vaccines that were given during the pandemic. One was your vaccine for the virus. We all got our first dose, second dose, whatever it was. But there was one more vaccine that was given to our essential workers and that was the stimulus check. We needed them to be taken care of and keep showing up at work. So while people like me hid at home because I didn’t want to get sick, I didn’t want to walk into a grocery store, I didn’t want to walk into a pharmacy. We had package handlers dropping off those packages for me. I had groceries being dropped off for me. And those became the essential workers.

So the way we define essential workers today is not only in healthcare. What they did, it’s beyond our understanding how they did it on a day to day basis. Taking care of our health. But even other workers who had to step of their homes to earn a living. That is your essential worker. You have to leave your home to earn your wages. So that really became the definition of essential worker. We work with clients who are caring. Today they are looking for knowledge and the right tool to help their people.

But let’s talk about the life of the essential worker. Simply put, I come in, I clock in, I work seven, eight, nine, 10, 11, 12 hours, take care of business. Karen walks into a grocery store and she cashes out, there is that essential worker who helped her cash out, package her groceries, and she gets into a car and she goes home safe. Sabina sits at home, she’s waiting for a package handler to come and drop off her package because she doesn’t want to walk into some pharmacy. It’s been taken care of.

So this essential worker clocks in, clocks out. But now comes trouble. They have to wait for one week or two weeks sometimes to get paid for those hours they put in. Why? When my gardener comes in and gets all the work done, I don’t tell the gardener, “I’ll pay you on the 15th,” or, “I’ll pay you on the first.” No, they get paid when the job is done. That needs to be true for all. “I work today. I need to get paid today.” As simple as that. So that is what our platform does, but why do we need to do that? And this is what is sad.

Going back to 2008 when I talked to you about the financial crisis, banks getting bailed out. But today, if you are a second late or a dollar short, a bank will charge you $35, $40, $50 in overdraft fees. Now that is not because you don’t have a job. That is not because you don’t have money. That is because you have to earn to get your wages. So it is really the liquidity issue that our hourly workers are dealing with. In 2019, the fees and the interests that our frontline workers ended up paying was close to 190 billion, Karen.

Karen Rands:

Wow.

Sabina Bhatia:

It gets worse. In 2021, the estimate is about 250 billion. Out of that, the overdrafts that I was talking to you about are close to 26 billion. And that is because I punched in and I punched out and some technology decided that I should not get paid or I cannot get paid. So that is really the crux of the problem. The liquidity issue. And that is a problem we have to solve because if they have the funds to take care of their day-to-day expenses, they will be engaged at work, they can actually afford to go to work. Today, gas prices are $6 a gallon here in California. My trip to work every day, might cost me 10, 12, $13. If I don’t have liquidity, I cannot get to work, which means I cannot earn my wages, which means I can’t pay for my expenses. So that is the problem we are trying to solve to start.

Karen Rands:

Yes. So that feeds into this idea of what is it like to be the working poor today. And we talked a little bit earlier. One of the things during the pandemic, we’ve had this term that we call gig economy, we’re a gig economy. And part of it originally was thought of as, we’ve got folks that came out of college or something and they didn’t get something in their primary field or they changed what they wanted to do for a living so they pick up these gigs to give themselves flexibility and have the flexibility over their time and this kind of stuff. But in reality, they’re picking up that side gig, the night job, or the weekend job to delivery packages or deliver people to places as a supplement to their regular nine to five income so that they can make ends meet.

They can actually do that and pay all their bills, but when they got laid off during the pandemic and everything shut down, they got one paycheck from the government for unemployment, not for all those other gigs that they were doing. They didn’t get a check for each one to make up for the three paychecks they had coming in already. And I think a lot of people lost sight of that when they would blame people and the whole not going back to work and this whole thing about the shortage of employees. There’s a whole lot of other issues and it’s not because they’re sitting at home collecting government paychecks. It’s because they struggle to be able to pay for childcare or, now the cost of gas. Or there’s other things that limit their ability.

And in this case, it’s that two weeks before they have to get paid in your case. So talk about the impact that this kind of program can have for a company. Because really just about every company out there has people in customer service that are in the front line that are doing something where they’re interacting with the public, they’re interacting at the lower levels of stuff that they have this, your program, when companies adopt this. And also within that answer, does everybody go on that? And then some flexibility about your program. But really address the working poor and the impact that has on the efficiency of the business.

Sabina Bhatia:

We talk about this concept of livelihood. What does livelihood really mean? It’s only after you meet the needs of livelihood that you can actually move to financial wellness. So the state of the 44% of Americans in the front line of industries, livelihood needs are defined as food, shelter, clothing, just for basic comfort. Once you have those costs covered, you reach that level of financial wellness, which means self-esteem, being empowered to save, doing all those other things that most employers speak to us about. They want the employees to get to that point. But the fact is, 48 out of 50 states today, Karen, is experiencing a gap in livelihood. Which means even their basic needs are not met. Now I am referring to the richest country in the world, Karen.

Karen Rands:

Right.

Sabina Bhatia:

Right. This is our experience in the US. And that problem needs to be solved. And I’ll talk to you a little bit about what our users are experiencing, but we run surveys all the time. And here is the reality. If our users are given %100 to cover that gap between what they need for livelihood versus what they need for financial wellness, 68% of them will spend those $100 on food. 60% said that they will spend it on transportation. And about 50% said they will spend it on utilities. So just the basic needs. Just $100. That’s all that they’re asking for. Just $100.

So what we’ve seen with our client base and our user base, today we are serving more than 2000 clients and more than 4 million users, and what we’ve seen from them is that one, 90% plus say, “I will switch jobs to an employer who provides me earned wage access. Because if I’m not working for that employer, I will leave a shift in the middle of the day and go and complete an Uber ride, because I know I’ll get paid at the end of the day. Or I’ll go and pump gas at a gas station across the street from my employer and just get paid after I’m done for the day. Why do I need to get paid for that day? I need groceries. If my child has an emergency, I need to take care of that. I cannot wait for two weeks to get paid because the expenses and the income are just not aligned.” And that is the experience of our user base. That is what our user base is using funds for.

Now they can access up to 90% of their wages any day they want on our platform, but they don’t necessarily do that. Some do because they feel why not. Others that don’t, they take out $100, $200 and just take care of their business. So they come happy to work, they love their employer. 90% say that, “I will be happy to recommend my employer to another friend because they take care of us.” That is really what we are seeing in our user base. And that is the life of the hourly worker. 48 out of 50 states have that gap.

Karen Rands:

So it then becomes something that is a true competitive advantage to be able to offer this. And it sounds like, from an employer standpoint, it’s not like it’s all or nothing. By implementing this, they’re empowering their employees to choose to get paid on a Tuesday instead of on a Friday because they had a bill they needed to pay by midnight Tuesday night. But if they don’t take that money on Friday when the computers do the reconciliation, they’re just going to send them whatever they’ve earned for that period of time that they haven’t taken in advance.

Sabina Bhatia:

Yes. It’s a zero cost solution for the employer. We have a zero cost option for the employee also. Whatever an employee accesses between the pay period, that is taken out in the form of a payroll deduction, what they do not access just goes into their direct deposit as usual. What we’ve essentially done is we’ve partnered with employers and said that, “Okay, you don’t have the technology and the tools to change payroll schedules, but we have the Payactiv platform that can help your users, your employees, put their own payroll on schedule.” So essentially our users are deciding what their payroll schedule should be like, we fund the transaction so nothing changes for the employer, there’s no cost to the employer, but you have a happier workforce and a more engaged workforce. So why would you say no to that benefit?

Now, employers are saying that, “Okay, you’ve taken care of that short term problem.” And that is of liquidity, “But what else? Because I need to make sure that my employees have true financial wellness.” That means more than just liquidity. And I don’t mean to say just in a negative tone, I want more than what you can offer me. So our platform, we give them access to their earned but unpaid wages, but we have flexibility, we have financial counseling for them, we have financial literacy for them, we have a save to spend tool for them where they can plan for a better future because now they’re not spending $35 on overdraft fees, they’re actually taking that money and taking care of business. So they’re not wasting a couple of hundred dollars every month on these predatory fees, they might be able to save.

But in addition to that, they don’t have to ever worry about, do I have income available to grab an Uber ride because my child has an emergency at 3:00 AM. They can actually grab an Uber ride on our platform using their earned but unpaid wages and taking care of their personal emergency. So it’s really giving them an all encompassed financial wellness solution. So we don’t stop at liquidity. We give them a lot more. And that is what we are seeing has longevity in the life of a user. Let them live the life they’ve earned. They’ve helped us build this economy in the last few years when, Karen, you and I were kind of hiding inside and we did want to go out. So let them participate in that economy, let them enjoy what is rightfully theirs. So that is how we think.

Karen Rands:

Yeah. So how does Payactiv make their money? Because if you’re not taking a percentage of the employee side or the employer side, is it an overall, similar to the way health and wellness programs work that companies sign up for on the insurance and physical fitness side? Is it similar to that and these other services that you offer?

Sabina Bhatia:

We have a zero cost solution. We have a fee based solution. We provide them the flexibility as to where they can transfer the funds. And depending upon where they transfer their funds, they can charge a $1 fee or a 2.99. The great thing is, as we’ve grown as an organization, we see more and more employers who say that, “You are saving us so much on retention and turnover and helping us recruit by providing the right benefit to say to our prospect employee that, ‘Come work with us, you can get paid any day. Even from day one.’ That we will pay the fee for the users, not a problem. Our employees should not have to pay to access their own earned but unpaid wages.” So talking about using technology for good, our platform gives them the flexibility and gives them any way they want to access their wages. So the fee structure is defined accordingly.

Karen Rands:

Yeah. So it seems like the owners of businesses have done some, and maybe it’s just because it’s been around for so long, but there are a lot of studies and research that says a healthier employee is a happier, more productive employee. If they are able to not worry about health issues, and insurance becomes a big thing for a recruitment tool, because they offer insurance or they offer some kind of healthcare program. And if they are able to avoid some of the long term illnesses that people get as a result of lifestyle because they’re informed, because they have these wellness programs, a lot of companies it seems like they have adopted, particularly the big corporations out there. So do you see that? It seems like this financial wellness concept, and we do know that we’ve had this huge rise in mental illness and anxiety, and I would bet that, and you, I would guess, know this, that a big reason for that is financial insecurity. And the financial insecurity that people feel makes them be anxious at work and be distracted at work and not put their all in.

And so they’ve looked at that on the wellness side for a long time. And we’ve see this rise up in this effect that people have in the way that they address the stress that they address at their work. Do you have the studies yourself and the results that show that this kind of a program for earned wage access is as powerful as any kind of health and wellness program that a company could offer, or even as attractive from an employee retention as healthcare is and insurance benefits as in a company?

Sabina Bhatia:

Karen, let me ask you a question. When was the last time you went into your insurance or your healthcare portal?

Karen Rands:

Well, I’m unusual in that. I have been in mine in the last month a few times because they’re getting… But before that, a year.

Sabina Bhatia:

When was the last time you went into your bank account?

Karen Rands:

I do that on a semi-regular, if not daily basis, at least every couple of days.

Sabina Bhatia:

There you go, Karen. Now think about an hourly worker making 12, 13, $14 an hour. One, they don’t all qualify for health insurance. That’s one thing. So the need to go into their insurance portal or healthcare portal doesn’t even arise, but they do go in where their money sits because they at least have to take care of their day-to-day expenses. I go into my banking app at least once every couple of days. So when you talk about what users need and the whole mental wellness, and things like that have become a big deal right now, one of the biggest challenges, tons of surveys have been done, 55% of workers say that their biggest challenge at work is around financial wellness. That is the biggest chunk of the problem.

I was actually most recently in Las Vegas last week and there was the Health and Benefits Leadership Conference. We presented at the Innovation Zone. And I am not kidding you, more than 50% of the books there were about mental wellness. Because you already have the financial wellness issue that you have to deal with and you have to solve. In addition to that, the pandemic has created more problems. And that could have come from just being at home and being disconnected, organizations trying to struggle, that, “How do I communicate with my people? I’ve never had to do this.” We have call center clients who said that, “I had this brick and mortar model where 99% of my call center agents worked under a building. And now I’ve had to move 80% of them home. How do I communicate with them? How do I manage them? How do I make sure that they are doing okay?” So mental wellness is also an issue the pandemic has escalated.

So today, hourly workers are going to the employers and saying, “Time is up. You cannot have a set of benefits that work great for white collar, work great for salaried, and then you have a whole different set of benefits for me, the hourly worker, when I’m the one who is taking care of Karen at the grocery store or Sabina waiting for her package.” So your client, you cannot have two different set of benefits. You have to find a benefit that is aligned with our needs. And that should be the culture of an organization. We are, with great happiness, I’m so, so excited to say that the employers that we speak to, they truly care. This negative connotation around HR doesn’t care, HR is just there to correct you. No, they really care. They’re just looking for the right tools to help them provide that to the people. And that’s where we are stepping in. So financial wellness, mental health, is a big problem today and it has to be solved for better recruitment, retention, and turnover.

Karen Rands:

Absolutely. And I think you gave a up a statistic when you were chatting there for a second, I’m trying to remember what it was, the context. But it was the amount of… Oh, because to me it’s a big soft dollar cost, this turnover, that when I work with companies about scaling and a lot of the investors that are out there and the investor group, they have this portfolio that, well you’re in Silicon Valley so you know, you probably hear this all the time. The 10 companies where three will go out of business and three will do, okay, and then two will do pretty good and one will hit it out of the park and make it up for all the other ones. And to me, the reality of the ones that are in that middle.

They haven’t completely died. There’s a lot of those. Those are the companies that just struggle to scale and they don’t know why. They missed a round of funding and so they didn’t, and then they’re struggling together and every dollar goes back into growing the company and they get into this sort of spiral of not investing in their people, not investing in, they look at hard dollar costs. What’s the cost of their inventory or what’s their cost of being able to real time and supply chain and things like that. And not the people cost and the turnover cost and the retention cost and the sick days where people call out or in the example you gave, they leave early because they got this gig that they can get paid today. Do you have data on that particular stuff, on those soft dollar costs, and how it’s impacting America, because they act oblivious to this financial wellbeing crisis that we find ourselves in with 44% of our workforce?

Sabina Bhatia:

Recruitment, retention, turnover costs are expenses without an invoice. That’s [crosstalk 00:36:43]. People don’t realize that employers spend two to three times the salaries, the compensation, of an hourly worker in just recruiting them and training them. And then the highest amount of turnover happens within the first 30, 60, 90 days. One of the reasons why it happens is today as employers are recruiting, remember you might be recruiting someone who hasn’t worked for months, maybe more than a year. Or you might be recruiting someone who today is not just supporting themselves and their immediate family, but the extended family that lost their job during the pandemic who got sick [inaudible 00:37:27]. Whatever it might be. Lives are a lot more complicated today. So if you are going to tell that worker that you’re not going to get paid for another two, three weeks, they’ll be gone to pump gas at that gas station across the street because today they will get paid.

And think about what the employer spent in time and in monetary value in trying to recruit them and train them. So the cost is high and employers know this, but now they’re being proactive and reacting very quickly to the needs. Actually on our platform, we added two other services. One is the employer didn’t have to, and didn’t find the need to communicate with the hourly folks. So they didn’t necessarily have all the right tools. You can’t send an email to your grocery store employees hoping that they’re checking emails and they’re looking at newsletters. You and I, Karen, we get excited when we listen to a Ted talk. They don’t. They want their money. So are you going to send me a piece of communication that says how I’m going to get my money today? Well, that’s a whole different story.

So we’ve actually built a service called Connect where employers can communicate with their hourly folks. And the reason they can communicate with their hourly folks on that Connect platform is because we become that platform where they come and communicate with their income. They access their income. So we’ve built that. In addition to that, we are also helping employers and saying, “Listen, I have 4 million plus people sitting over there who are looking for a gig or another shift because the employer is unable to give me six hours or eight hours a day, 40 hours a week. What the employer is doing is 10 hours a week because there’s just opening up after the pandemic. So I want another shift.”

So an employee today on our platform can find another shift and can find another job. So an employer does not have to post 1,000 openings on some platform where the skillset doesn’t match or the hourly rate doesn’t match. We have hourly folks on our platform looking for jobs. And so employers are able to look for more talent on our platform too. And this is what goes into the whole concept of financial wellness. Liquidity is easy now. We are taking care of that. But we are doing a lot more for employers and employees. That is really what provides that quantifiable impact when we talk about B Corp. And doing it the right way. Conscious capitalism, things like that.

Karen Rands:

Yeah. That’s brilliant. I’m so glad to hear that you have this platform. Just like people check their mobile phone their Venmo or something like that, or like on an Uber, they can go and they can find a gig, they can get paid for a gig and pick up others. I’m so excited that’s an integrated part of what you offer besides just sort of the esoteric ability to do this and connect with people. You give them these tangible tools that truly solve a problem in a couple ways. Now, do they also have a way to pay direct? Like if I want to take it from here, I don’t have to go through my bank, I can go straight to pay the electric bill or something like that. Do you have that functionality as well?

Sabina Bhatia:

Yes, we have bill pay on our platform. And I’m glad you mentioned this because here’s another thing that happens. And employers tell us all the time. An employee will leave in the middle of a shift to go to one of those check cashing places to pay a bill. It’s strange. You go to a check cashing place and you pay a fee to pay a bill on time. That makes no sense to me. What makes sense over here is that some financial institution has found a way to monetize you because you don’t have a banking account that allows you to pay online bills.

So our people, and this is how our employer partners talk, our people. And we love that. These are your people. You have the power to make the change. Straight from our app, they can take care of bills at no additional cost. And that’s really what financial wellness is about.

Karen Rands:

I love that you do that. Because that’s the other thing that over the years in working with startups and different stuff, there’s been companies that have been trying to address the unbanked. And people that oftentimes, particularly if they’ve not been in that situation, they think the unbanked are just a really poor element of our community that can’t qualify to be a part of a bank. But in reality, it’s people that have moved here from another country. I had a friend of mine, she was a high level executive at a transportation company that had moved here from England. It took her like three months to be able to get a bank account here in the US even though she had plenty of money to put into a bank. But it’s just the banking rules of the unbanked. Or if you get divorced. Sometimes that’ll make you trigger because how it was set up before to be unbanked. If you moved and you don’t have that electric bill and this bill and that bill to prove where you are in your lease and this other kind of stuff, to prove that you get. There’s a lot of reasons why people will go in and out of being in an unbanked thing that it has nothing to do with their income. It has everything to do with regulations and the control that the financial institutions put on it.

And so, again, I’m just really excited to hear that Payactiv has a way to solve that problem for folks. I could totally see why companies view this as an attraction and retention tool with their employees. Because if you get all of that functionality along with the job that you enjoy doing and get paid for, but you solve all these other problems that you might be paying a fee here and a fee there for, and now you don’t have that, I would think that employees would now start saying, “Well, I’m not going to work anywhere that doesn’t have Payactiv there.” 

Sabina Bhatia:

Your conversation about employers and employees reminded me. Just last week, we ran a survey and we saw that our users that access their earned but unpaid wages and Payactiv in general, their overdraft fees drop by 20%. That is a huge change when you are making 13, $14 and instead of paying $200, $300 in overdraft fees, now I pay two less overdraft fees or three less overdraft fees. That is a huge impact on a user’s life. And we share that kind of data with employers and employers are now telling us that, “Oh, I thought I took care of the problem because my people don’t go into payday loan places anymore paying 300, 400%. Now you’re telling me that they’re paying overdraft fees.” And I said, “That’s when financial wellness kicks in.” So there’s a lot more that needs to be done there. Yes, they don’t go to payday loan places because now they have access to their earned but unpaid wages, but now we have to get to a point where they can access their wages any day they want. As long as they’ve earned it and they need it, they should be able to access it.

Karen Rands:

Yeah.

Sabina Bhatia:

So there is a huge change in culture, in the mindset that we are seeing. And there’s a lot more work to be done there. We’ve been used to the old times of getting paid every two weeks for decades. And the time has changed. I get paid any day I want to, I go into Payactiv and I access my wages any day I want to. And that should be true for everyone.

Karen Rands:

Yeah, absolutely. Well with that, I thank you so much for being a guest on the Compassionate Capitalist show, Sabina. Anything you want to add? And please, everybody, please go to payactiv.com and check it out either because you’re an employer, you want to recommend it to your employee and you want to recommend it to your HR department or your boss or have they looked into this stuff as well as those companies out there. Whether you’re small, medium, or large, look at this as a mechanism to grow your company because that soft dollar expense of turnover and retention has been reduced. And ultimately that means that you’re a more profitable company and had the ability to scale because you got a more reliable workforce and this gave you that. What else would you like to add?

Sabina Bhatia:

Karen, I would love to have you on some of our partner calls. I won’t have to say much with you around. No. Thank you so much for doing this with us. We are both humbled and flattered. We are here to help any employer who wants to make sure that the employees live the life they’ve earned.

Karen Rands:

Yes, absolutely.

Sabina Bhatia:

It’s their income. They should be able to access it. Thank you.

Karen Rands:

Thank you. And with that, onwards and upwards. Everyone have a great day. Thanks for tuning in. And please share this podcast with somebody you know that will benefit from it.

Sabina Bhatia is an accomplished C-Suite Leader and customer champion tirelessly fighting for the financial wellness of every American worker. With great passion and focus, Sabina has been instrumental in building the financial category of Earned Wage Access from infancy to mainstream adoption as the most important employee wellness benefit of 2022. As a Chief Customer Officer at Payactiv, she acts as a daily advocate and amplifier for the needs of thousands of corporate clients and millions of lower-income workers.  

Karen Rands, is the leader of the Compassionate Capitalist Movement™ and author of the Best Seller, Inside Secrets to Angel Investing. She is an authority on creating wealth through investing and building successful businesses that can scale and exit rich.  Visit https://kugarand.com to learn how to hire her firm to identify the red flags of deal before you invest or try to raise capital.