Company type | Private |
---|---|
Industry | Financial Services, Apps |
Founded | 2013 |
Founders | Ram Palaniappan |
Headquarters | Palo Alto, California |
Key people | Ram Palaniappan, CEO |
Website | earnin.com |
Earnin is a company whose mobile app lets its members access the wages they've already earned, before payday, without fees or interest. [1] Founded as Activehours in 2013, the app launched in May 2014. [2] [3] It expanded its services in 2019 to include negotiating with doctors and hospitals to lower its users medical bills. [4]
As of December 2018, the app had about one million downloads and was used by workers at about 50,000 businesses. [5]
The company was founded by Ram Palaniappan in 2013. [2] While president of Rushcard, Palaniappan found out that some employees occasionally skipped work because they did not have the money to pay for gas prior to payday. He set up a service to pay employees in advance of payday. After he left Rushcard, former employees asked him if he could continue to offer the service. [6]
Instead of charging interest or a fee, the member is asked to leave a "voluntary tip" for each transaction. The app suggests multiple tip levels for every transaction. [7] In 2019, the company's tip suggestions ranged from zero to $14 for a $100 advance. [8] Tips are capped at about 15% of the $100 daily limit. [9] After a member's scheduled wages are deposited in their bank account by their employer, the company automatically withdraws the cash out and the tip. [10] [11] Payments are only made for hours already worked and with a daily cap of $100. There is a pay cycle maximum advance cap that varies by user. [1]
The company raised $4.1 million in 2014. [3] At the time, some questioned whether the business model was viable since tipping was voluntary. [3] The company said in 2014 that it used "bank grade" security. Money transfers are made with the same “automated clearing house” system employed by banks. [2]
The company has partnered with Uber to allow its drivers cash out after a shift. [12] It has a similar arrangement with Sears. [9]
By 2017, the company had raised $65 million in funding. [13] And in December 2018, it raised an additional $125 million. [5] It rebranded from Activehours to Earnin in 2017. [14]
In April 2019, the New York State Department of Financial Services investigated whether the company's "tipping" system skirted New York State lending laws regulating payday lending. [15] [16] An article in the New York Post said that members who do not leave tips may have their monthly maximum restricted, which may trigger interest rate disclosure laws. [17] New York State subpoenaed information from the company, including a calculation of annual percentage rates if tips were measured as fees or interest. [16] In 2019, there were also consumer complaints about glitches sometimes resulting in delays in fund transfers. [17]
In May 2019, the company began offering its users a service to negotiate for a reduction in outstanding doctor or hospital hospital bills. The company will also negotiate installment payments for outstanding medical bills if it can. [4] The service is offered without a fee and members are asked to leave a voluntary tip for good service. [18]
Company type | Private |
---|---|
Industry | Financial Services, Apps |
Founded | 2013 |
Founders | Ram Palaniappan |
Headquarters | Palo Alto, California |
Key people | Ram Palaniappan, CEO |
Website | earnin.com |
Earnin is a company whose mobile app lets its members access the wages they've already earned, before payday, without fees or interest. [1] Founded as Activehours in 2013, the app launched in May 2014. [2] [3] It expanded its services in 2019 to include negotiating with doctors and hospitals to lower its users medical bills. [4]
As of December 2018, the app had about one million downloads and was used by workers at about 50,000 businesses. [5]
The company was founded by Ram Palaniappan in 2013. [2] While president of Rushcard, Palaniappan found out that some employees occasionally skipped work because they did not have the money to pay for gas prior to payday. He set up a service to pay employees in advance of payday. After he left Rushcard, former employees asked him if he could continue to offer the service. [6]
Instead of charging interest or a fee, the member is asked to leave a "voluntary tip" for each transaction. The app suggests multiple tip levels for every transaction. [7] In 2019, the company's tip suggestions ranged from zero to $14 for a $100 advance. [8] Tips are capped at about 15% of the $100 daily limit. [9] After a member's scheduled wages are deposited in their bank account by their employer, the company automatically withdraws the cash out and the tip. [10] [11] Payments are only made for hours already worked and with a daily cap of $100. There is a pay cycle maximum advance cap that varies by user. [1]
The company raised $4.1 million in 2014. [3] At the time, some questioned whether the business model was viable since tipping was voluntary. [3] The company said in 2014 that it used "bank grade" security. Money transfers are made with the same “automated clearing house” system employed by banks. [2]
The company has partnered with Uber to allow its drivers cash out after a shift. [12] It has a similar arrangement with Sears. [9]
By 2017, the company had raised $65 million in funding. [13] And in December 2018, it raised an additional $125 million. [5] It rebranded from Activehours to Earnin in 2017. [14]
In April 2019, the New York State Department of Financial Services investigated whether the company's "tipping" system skirted New York State lending laws regulating payday lending. [15] [16] An article in the New York Post said that members who do not leave tips may have their monthly maximum restricted, which may trigger interest rate disclosure laws. [17] New York State subpoenaed information from the company, including a calculation of annual percentage rates if tips were measured as fees or interest. [16] In 2019, there were also consumer complaints about glitches sometimes resulting in delays in fund transfers. [17]
In May 2019, the company began offering its users a service to negotiate for a reduction in outstanding doctor or hospital hospital bills. The company will also negotiate installment payments for outstanding medical bills if it can. [4] The service is offered without a fee and members are asked to leave a voluntary tip for good service. [18]