- Aims to bridge gap between traditional banking & Asia’s unbanked
- Plans to expand across Asia via Visa’s cross-border capabilities, network
Paywatch, an Earned Wage Access (EWA) startup based in Malaysia, announced last week an MoU with Visa to promote financial inclusion among Asia’s workforce. In a statement, the firm said it aims to bridge the gap between traditional banking services and the unbanked populations in Asia.
According to Alex Kim (pic, below), President/co-founder of Paywatch, the underbanked population in Asia may be able to open bank accounts but are often completely excluded from other financial services offered by legitimate institutions.
“In our markets in Southeast Asia, those in the lower or middle-income segment face significant challenges in accessing short-term liquidity solutions. Paywatch provides employed individuals with direct financial access to a safer and more accessible alternative to traditional credit cards and predatory lending practices,” he said.
“We are on a mission to disrupt the payday loan industry and predatory lending practices through our EWA solution which is not a salary advance – this is money that is already earned by the employees and belongs to them,” Alex said.
“As such, it was important to us to ensure that employees have access to their hard-earned money without being burdened by high fees and charges, and that’s why we benchmarked our fees to ATM fees at US$0.21 (RM 1) per withdrawal, ensuring that our solution is transparent and affordable for all,” he added.
Alex said that in this way, Paywatch is helping companies process payroll on a real-time basis, so that employees have more frequent access to their salary. He stresses that by giving on-demand access to salaries, Paywatch seeks to promote greater financial stability and independence.
Companies that deploy its solution provide a valuable employee benefit where, as long as their workers are employed with them, the employees are able to immediately access a percentage of their wages as they earn.
Paywatch said the launch of its EWA solution in partnership with financial institutions like Hong Leong Bank in Malaysia, Hana Bank in South Korea, and more, ensures fair pricing and consumer protection while also serving as a bridge to help employees get banked, build credit, and achieve financial security.
He also outlined that as part of Paywatch’s partnership with Visa, the startup aims to further promote financial literacy and inclusivity and to help individuals break free from the cycle of debt caused by predatory lending practices.
Meanwhile, Richard Kim, CEO/co-founder of Paywatch and Alex Kim’s older brother, said working with Visa reinforced its commitment to financial inclusion across Asia. “As we expand, this comes at a crucial time as we seek to explore innovative financial solutions that empower our users.”
Presently, Paywatch plans to extend its reach to more of Asia’s workforce and promote financial inclusion by leveraging Visa’s cross-border capabilities, network, and financial literacy and digital education content.
As a first step, the firm said it will develop digital education content to promote financial inclusion and extend its reach to more of Asia’s workforce who need accessible financial services.
“We recognize the importance of cross-border capabilities and networks, and we are collaborating with Visa to develop additional payment solutions that will provide our users with more financial access and convenience beyond our Earned Wage Access solution,” Alex said.
“We are looking to further expand into new markets across Southeast Asia and will launch in the Philippines in September and in Indonesia by the end of the year,” Alex said.
To date, Paywatch has raised US$14.2 million (RM66.3 million) in funding over three rounds. Its funding journey began with a seed funding round in January 2022 whereby the company raised US$4.68 million (RM21.9 million), led by venture capital firm, Third Prime, followed by a second seed round in December 2022, where it raised US$9 million (RM42 million), also led by Third Prime. This round also saw participation from Parkwood and Hana Ventures. In a subsequent round in February 2023, Paywatch secured an undisclosed amount from Gobi Partners through its Gobi Superseed II Fund.