One out of four people in France find themselves in overdraft every month, generating about €7 billion ($7.6 billion) in bank overdraft fees, said Louis Ajacques, co-founder at French HRTech firm Spayr.
This situation, he added, is very common because advance salary payment, although a right enshrined in the French labor code, is rarely used by employees due to the time-consuming nature of the demand, from when the request is taken into account and validated by human resources to the transfer of funds to the employee.
“An employee has the right to ask for a salary advance but the process is very long and not at all fluid,” Ajacques told PYMNTS in an interview. “From the moment you ask for it and the moment you receive your money, it can take three to four days, which doesn’t resolve the urgency issue.”
And like most money-related topics, it’s also a taboo subject: “It’s an uncomfortable money topic, which is why some employees avoid asking their managers about it altogether,” he added.
It’s a challenge an early wage access platform solution like Spayr can help solve, Ajacques said, enabling employees to gain control of their salary and avoid overdraft fees by giving them access to up to €300 (about $329) of their earned wage anytime in the course of the month with a few clicks.
“Payments are instant, so you can have an urgent need and in five seconds receive your cash. And for the company, there is nothing to do, as the whole process is automated, so it’s a huge gain of time for both sides,” he explained, adding that at the beginning of each month, employers deposit 5% of their monthly salary mass into a Spayr wallet to cover payments.
Asked about how open employers have been to adopt the model, Ajacques said there’s been a huge shift since the firm launched in 2021 as companies try to catch on to emerging trends around the future of work.
“The future of work is basically putting the employee back at the center of the equation, and employers have no choice but to adapt to what the employee wants, and flexible access to their salary is part of this growing future of work trend,” he said.
Beyond on-demand salary payments, the platform provides users with different budget management solutions, including basic saving tips like where to get the cheapest fuel close to home and renegotiation of utility contracts to cut down costs.
“A user just has to send us their internet, phone or insurance bills and we can renegotiate their contracts and help them save thousands of euros per year,” Ajacques said.
The solution is also complete with individualized coaching “because in the long term the real problem we want to help employees tackle is, How can you better manage your budget and achieve your goals while going into overdraft?” he noted further.
Moving forward, he said the goal is to strengthen their position in the French market before expanding their business internationally sometime next year, alongside plans to expand earned wage access beyond fixed monthly salary to other forms of compensation such as 13th month pay, end-of-year bonuses and commissions on sales.
And the fact that millennials and the younger generation, one of the key drivers shaping the future of work, have embraced the solution shows that the firm has a strong growth potential, Ajacques said.
“When you look at the polls involving young people under 35 in France, you have 65% of the respondents who are saying that they would like to have this kind of flexible access payment solution, so it’s very popular and [will keep driving demand].”
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