Byline: Todd Nelson
Editor's note: Spotlight is an occasional feature about a company, entrepreneur, or business issue.
Business: Fintech startup offers instant paycheck advances at no cost through a free debit card and checking account for hourly workers
CEO: Atif Siddiqi
Employees: nearly 60
Branch, a Minneapolis fintech start-up, is branching out to offer hourly workers across the country no-fee bank accounts and debit cards in addition to free instant pay advances.
CEO Atif Siddiqi launched the Branch app to enable workers to manage schedules and pick up extra shifts to increase earnings.
Branch added fee-free pay advances earlier this year to differentiate itself from other scheduling apps and advance the company's mission of "helping hourly workers grow financially over time," Siddiqi said.
In October the company began offering free digital checking accounts and debit cards to hourly workers in a partnership with Mastercard and Evolve Bank & Trust.
Partnering with restaurant tech
With its app already in use by hundreds of thousands of employees in tens of thousands of locations nationally, Branch this month moved to expand its reach further, teaming with St. Louis Park-based Delaget, a restaurant management software company, to make Branch available to restaurant operator clients with 10,000 locations. Delaget clients represent some 20 mostly quick-service restaurant brands including Taco Bell, KFC and Pizza Hut.
In addition to pay advances that can help workers avoid late fees on bills and bank overdraft fees, Siddiqi said, the app includes budgeting tools to help users manage cash flow between paychecks. In any given pay cycle 20 percent of Branch users may take a pay advance.
For employers, offering Branch can boost recruiting and retention of talent, Siddiqi said.
"With the low unemployment rate they're doing everything possible to get people into the organization and they're still seeing anywhere from 75 percent to 100 percent turnover year-over-year," said Siddiqi, adding that the cost of replacing an employee averages $2,500 including recruiting, on-boarding and training.
With 80 percent of Americans living paycheck-to-paycheck, Siddiqi said, Branch is set to grow.
'Significant opportunity to grow'
"It's a fairly big opportunity especially with our focus on working with employers," Siddiqi said. "I think there's a significant opportunity to grow and...