Activehours Solves Age-Old Problem with New App

concept of man accessing his financial assets and liabilities using takes a look at a whole host of fintech companies, many of which provide simple solutions to age-old problems. Activehours is a good example of this. It is a company that has developed an app to provides users with cash advances on their wages, so they won’t be stranded without cash until their next payday.

Activehours had a fantastic idea, which is to not even charge for the use of their service, but suggest a tip for using the service. This makes direct competition for payday lenders. This app could save a lot of hassle when the unexpected happens, car repairs or unexpected overdue bills. Having no interest to pay is a huge bonus, the app only suggests a non-obligatory tip for their service.

Investment has helped Activehours develop

Activehours just raised $22 million in funding after a series A funding round, led by Martix Partners. Another great advantage of this service is that it doesn’t take into account the borrower’s credit history and doesn’t ask for a social security number.

Anyone who has a checking account and a job can access this service, but has found that they have struck partnerships with big employers already, making it easier for their employees to access the service. Sears, Walmart, and Uber have all partnered with Activehours.

How Activehours makes money charging no interest

Another way for the app to make money through tipping is that anyone on the app can tip for another person completely anonymously. So, if a friend of the borrower wants to thank the app, they can send a tip, too.

With no fees and no interest, it may be strange to think that this company is still economically viable. But Activehours CEO and founder Ram Palaniappan says that people do indeed tip enough for the service. The users tip so much, in fact that the company can predict its revenue from employees in more than 12,000 companies.

One worry is if Activehours actually helps its users or, for example, if there is not enough money left at pay day for rent. Palanippan says that Activehours helps its users with budgeting and education in an effort to prevent that happening.

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