Based in New York Clear finished one $ 15 million Series A funding round, bringing its total funding to $ 19.5 million after scoring $ 4.5 million during a roundtable a few months ago, TechCrunch reports.
This is what it does:
- The flagship offer of the neobank is a free payday advance product. It integrates directly with HR systems to allow customers to quickly access the money they have already earned. It also provides more standard neo-banking features, including spending and savings accounts, a debit card that can be accessed virtually through its app, and personal finance management tools. The neobank plans to use its new funding to continue to expand in areas such as healthcare and debt repayment, according to TechCrunch.
- Clair acts as an alternative to predatory payday lenders. U.S. regulators have been keeping their eyes on payday loans for some time: They’ve issued a call in March 2020 for financial institutions (FIs) to offer low-value loans to protect consumers in financial difficulty from having to turn to payday lenders. Clair’s solution joins the low dollar lending options of FIs, including the neobank by Varo Varo Advance and Bank of America Balance aid, as well as similar offers of early access to the wages of neobanks Carillon and Running.
Clair is spearheading its customer acquisition efforts with early access to salaries, a parallel approach to becoming a banking service provider. Instead of attracting new customers with attractive rates or perks on deposit products like savings or checking accounts, Clair tries to persuade customers using its free payday loans to use its banking offers as well. digital.
It is a high risk and high return strategy:
- On the one hand, Clair charges nothing for payday advances and even pays workforce management and payroll systems to integrate with its technology.
- On the other hand, clients that the neobank attracts have a high chance of using their new Clair accounts as primary accounts, given that they will already have a direct deposit relationship with Clair through their HR system.