CloudPay leads Visa into the payday advance market

CloudPay, a company specialising in employee compensation processes, has announced its partnership with Visa and the launch of their joint salary advance solution. Their scheme takes the form of a new payment method to compete in an increasingly competitive market.

FACTS

• CloudPay and Visa have developed a new solution that will enable payroll payments to be made directly to the debit or credit cards of employees of CloudPay's corporate customers.

• Technically, the solution will be based on Visa's real-time push payment platform, Visa Direct. This will allow employers to send payments to their employees directly to their Visa debit or credit cards.

• In addition, CloudPay offers an application called CloudPay Now which will be launched in June 2021. Connected to Visa Direct, CloudPay Now allows employees of CloudPay's client companies to manage their salaries.

• Employees can release funds 24 hours a day, and transfer those funds to their Visa cards in advance of their actual salary payment date.

CHALLENGES

• A new role for Visa Direct: Until now, the platform has enabled individuals to make P2P payments in real time and businesses to accelerate payments to their customers, suppliers, service providers and other freelancers. With CloudPay, Visa Direct is taking on a new role as a payroll support.

• Optimising payroll management: CloudPay is promoting the benefits of its new service for payroll managers. The company is highlighting the qualities of its device in terms of accelerating digital payments.

• Disrupting banks: Advances do not pass through the employees' bank account at any time. The two new partners promise that payroll payment cycles can be reduced from two to three days to a few seconds.

• Confirmed ambitions: In August, CloudPay raised $58 million in a round of funding to expand its innovative employee payment solutions. It is now a done deal.

MARKET PERSPECTIVE

• The commitment of a growing number of players is now focused on the logic of simplifying and modernising the offerings to companies. Payroll advance services have thus been supported by well-known FinTechs (such as Revolut, PayFlow or Activehours for example), but also by historical banks (Banco Sabadell supports Typs in Spain) or the accounting software reference QuickBooks.

• CloudPay, for its part, defends an expert position in a specific market. The company has some 1,500 corporate customers and offers its unified platform in nearly 130 countries.