Hi55 Ventures, the latest venture from Scottish Fintech entrepreneur David Brown has launched Hi, a digital payroll system.
The platform provides creditworthy companies with access to working capital based on their payroll. Lenders will be able to see its value and lend against it without adding debt to the balance sheet of the business.
Brown previously founded and was CEO of payments company Oxygen Finance. He also founded and held the position of chief product officer at digital financial services company Previse. He left Previse in 2019, co-founding payroll company Violet.ONE and, in June 2020, founded Hi55 Ventures.
Hi was developed in partnership with global IT services provider NTT Data.
For most companies, payroll is their biggest expense, generally coming in at over half of all business overheads. The Covid-19 pandemic has put pressure on many companies to ensure they have enough working capital simply to endure, let alone recover and grow.
Hi creates an asset class for working capital – Pay Asset Finance – which lets employees access their earned money weekly and, over time, instantly.
As such, investment-grade companies can externally finance pay, releasing working capital. The system also makes paying employees more accurate, efficient and frequent.
Hi allows companies to defer their payroll for 30 days or more. Instead, it is funded externally, freeing up a firm’s working capital.
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Companies with good credit ratings would be able to gain money at very low rates of interest. In addition, it would not be construed as debt as it would not appear on a company’s balance sheet.
The system allows employees to see what they earn as they earn it. An app facilitates employee and employer collaboration and enables employer approval of an employee’s time, while its technology seamlessly integrates with a business’s existing payroll and timekeeping systems. It standardises time and reduces time/pay errors.
Employees do not need to pay for Hi as all costs will be borne by the employer. It can be used as an employee benefit or employee retention scheme.
Brown said: “Hi’s new category of trade finance, Pay Asset Finance, enables employers to release much-needed working capital from their payroll – a global first. Our aim is to make payday obsolete and simply become a settlement system to monies owed and due to the individual employee, making pay itself become the new form of secured credit.”