ZayZoon uses innovative Fintech to solve a growing problem
By January 2023 edition of Business in Calgary, and Business in Edmonton 6 January 2023 4 min read
Inflation is soaring, prompting the Bank of Canada to hike interest rates. This in turn drives up the cost of living at a time when people are still recovering physically and financially from COVID. Even before the pandemic’s upheaval, North Americans were increasingly living paycheck to paycheck. Now, according an Exquifax® press release, Canadian consumer debit sits at over $2 trillion with the average Canadian burdened by $21,000 of debt – and that does not include a mortgage. In one year, debt loads grew 8.2 per cent, and Canadians report relying on credit cards to fill the gap between necessities and payday.
ZayZoon is determined to change this and save North Americans from high credit card interest, dangerous payday loans and NSF banking fees. The ZayZoon approach is unlike anything seen in the financial market before – and it’s keeping North Americans afloat when money is needed but payday is weeks away.
ZayZoon was co-founded by Darcy Tuer, CEO; Tate Hackert, President and Jamie Ha, CFO. All three have diverse backgrounds with varied experience in finance, technology and entrepreneurship. Together, they knew they could make a big difference for struggling North Americans.
“Payroll has been the same for the better part of the century, but the needs of employees have changed,” says Tuer. “ZayZoon gives employees access to the money they have already earned. We are not a lending company. We provide liquidity on our clients’ earned wages.”
ZayZoon for employees allows early access to funds within minutes of signing up. There are no hidden fees or interest rates, just a flat $5 fee. ZayZoon for employers integrates seamlessly with all major payroll platforms and activates in less than an hour. It is free for employers and carries zero risk and zero liability (employees that choose to leverage the platform as a company perk subsidize the benefit).
"For employers, ZayZoon is an important recruitment tool. Around 38 per cent of employees say stress affects their productivity. When financial stressed is eased, employers have better success with recruitment, retention and productivity."
He continues, “I often get asked if our product causes harm. It does not. We have procedures in place to prevent people from winding up in predatory cycles where their paycheck is gone before it comes in. For example, clients can access only 50 per cent of earned wages before payday. We also offer in-depth financial education and boosts such as gift cards to help employees get ahead.
“In a perfect world, everyone would be paid their wages daily for the work they have done. However, that is not how life works, and paying people daily is cumbersome from an administrative and cost standpoint. ZayZoon flattens out the flow and helps people living paycheck to paycheck – because food, bills, medication and emergencies do not line up with traditional pay cycles.”
An analysis of client spending/earned wage access reveals where ZayZoon payouts are going.
“The vast majority of our clients are using ZayZoon to cover essential purchases,” reveals Tuer. “In this time of economic upheaval and soaring inflation, the emergency fund is, for many, a thing of the past. People are sitting on high-interest payday loans and credit card debt. In America, a huge portion of the population lacks the financial means to maintain credit worthiness and they remain unbanked. The system is different in Canada, but we still have a large underbanked population. We give North Americans the ability to streamline access to earnings. It’s their money. Providing better access to earned wages is our social mission.”
Since ZayZoon is a new concept, access to capital and finding a lending institution that shares the company’s social vision was a challenge. That is, until ZayZoon connected with ATB.
The co-founders spoke to many banks but most took a traditional view of the business. Without tangible assets in the company to act as surety, traditional banks shied away. ATB took a different approach.
“Our partnership with ATB was transformative!” describes Tuer. “Since we fund payroll in advance, you can imagine there is apprehension about putting that level of capital into the market for an emerging tech company with an unproven, untested idea. When were introduced to ATB, they took a keen interest in not only our business, but also our positive social impact. They liked that we are a local Alberta company solving problems across North America, and took time to build a trusted relationship. ATB provided us with the capital pool we needed. Partnering with ATB gives us the time we need to focus on adding value for our customers. As we grow, ATB is there.”
ZayZoon took a calculated risk in introducing a fintech concept that would impact traditional payroll models. Was it a success?
“We have experienced double digit month-over-month growth for nearly two years and expect that to continue through 2023. Our success is due to the collaboration among the co-founders, the ZayZoon team and ATB. Most of all, we owe our success to the clients for whom we provide a tangible solution. We will continue to be very curious about and focused on the problems our clients have and how technology can provide them with better financial outcomes.
Learn more at ZayZoon Wages On-Demand.
From the January 2023 edition of Business in Calgary, and Business in Edmonton. Shared with permission.