Percapita

Launched in 2023, Percapita delivers financial services in a way that is meaningful and useful, and making you confident about how you manage your day-to-day finances.

Meaningful and useful financial services

Melissa Fox, Head of Deposit Products and Payment Solutions at Percapita, came on board in March 2021 following her initial engagement as a consultant to the fledgling company, when the idea was - at first - to launch a credit card product. "But as we dug deeper into customer needs, we realized that the start had to be more basic, with tools for saving, spending, and then getting to borrowing." So the approach was to center on customers who were not financially literate? Melissa disagrees strongly with that, "Many of our customers are actually very financially savvy because they have to manage their money and their options quite carefully. Some of them are indeed new to banking, so, there is an education component for some people, but I wouldn't say our customer base is unsophisticated." She says that banking terminology and jargon can be inaccessible, which is why Percapita's mission is to use everyday language to explain things in an intuitive way that might not otherwise be clear. Diversity and inclusion are also key Percapita principles which are not always present in the mass market. Banks and financial companies are typically focussed on affluent segments of the population, and Melissa points out that potential Percapita customers have needs that may therefore get 'glossed over'. "We want to center on their needs and experiences and build products specifically aimed at addressing those needs and pain points. Whether that's from a cost perspective, or a tools and planning perspective, from an education perspective, or a trust perspective. We deliver financial services in a way that is meaningful and useful."

Breaking the debt cycle

So there's a clear need for end-users to receive financial wellness education, and much better management of their income, which Percapita believes can best be done by working with employers. A key offering is Early Wage Access, or EWA, which allows an advance on earnings based on actual wage and time system data provided by employers. Businesses can sign up to the Percapita platform, or even have their employees request company membership. The result will be fewer employees forced to go to payday lenders, and - as the word spreads - more and more employer partners signing up. As Melissa explains, with a typical payday loan, if it is repaid within the timeframe, it's an expensive loan but still OK if you do pay it off. The problem is that if the loan is not repaid on time then there are penalty fees on the back end that make the loan balloon, and "It can absolutely suffocate people and trap them in a debt cycle."

The Percapita Pay service is available through their partnership with a third-party provider, Immediate Solutions, Inc. There is no cost to employers, and employees simply pay a $3 fee per EWA request. So Percapita is a purely philanthropic institution? While it may look like that at first sight, Percapita is not a non-profit organization. The company's goal is to provide affordable financial services with clear and transparent pricing so customers can make informed decisions about their options. The company makes money through a $3 monthly fee on their Cash Account offering, which replaces out-of-network ATM fees, overdraft fees, and other hidden "gotcha" fees that bank customers are often not aware they've incurred until after they've incurred them. Percapita also earns interchange income from debit card purchases through the VISA network and a revenue share on some transaction fees, which are disclosed up-front at the time of the transaction.

The business seems to be ultimately about scale, however Melissa Fox is cautious about any suggestion of explosive growth. "Our goal is not to open up millions of accounts. We are not at this point a direct-to-consumer model. Our model is actually a B2B2C model where we are partnering with channel partners and offering the Percapita platform as an employee benefit. So a lot of our marketing is through those channels. From a business development perspective, we have to sign up the employers, and then work on getting the product into the hands of their employees."

Cohesive and intuitive

Percapita is starting to roll out its offer, although there are still a number of small 'kinks' that need straightening, which is why it's a soft launch, and not one done with all trumpets blaring. The expectation is that sometime around Spring 2024 things will be humming along, and the company will be scaling up. Melissa says, "My focus is on completing the build of the initial product set. We still have some additional functions and enhancements that we're working on to complete with the design team, and then we'll start to look at the next features and products that we're going to add to the platform. We will deliver that entire experience in a way that feels cohesive, easy to navigate and intuitive - when it's not just one product, but multiple options that people can choose. I'm excited about the challenge of building that out, not just as an app but as a platform experience."

Currently, the number of end users is in the hundreds, with the signed-up channel partners around five, but this could rapidly expand in the coming year. Just think of many major employers across the USA, with huge numbers of relatively low-paid wage-earners, and the benefits to both sides that can accrue from using Percapita.

Transatlantic teams

Speaking of 'kinks' to be straightened - that's with the technology of developing the website and back office processes, rather than regulatory issues? Kelly confirms that the journey to reach the present state of the Percapita offering has occasionally been a little bumpy, but she seems sanguine about this. To create a digital company out of thin air is no small feat, but perhaps surprisingly Percapita turned to European developers and UX-UI specialists to achieve this, "Probably because of the knowledge base the team has." And were there challenges to do with language, the US-European time difference, and even cultural differences? Generally, Kelly says, there were no issues at all. "The time challenge wasn't an issue. Because we say, 'Okay, here's what we want, please go off and do it.' And while we're sleeping, they're doing it, and the next day we look and say, 'Okay, there it is!' For the most part the time difference, the language, the culture… none of it has been an issue. I think everything has gone really well. And the team all works really well together."

Melissa comments on small factors in the 'Americanization' of some details when working with the European team, but nothing significant. She observes, "I don't know how much they had to learn about the US banking system, but whatever they did have to learn, they got up to speed really quickly. Conceptually, I didn't feel like I had to explain to them how banking works in the US because they came in with a working knowledge base. We weren't starting from scratch." The design process involves a weekly Cadence review, with iterative feedback, sometimes on a daily basis using Figma. "We talk about what needs to be designed and we present from a product perspective: here's what we want to do. We show some preliminary examples: here's the flow, and then they take it away and design it, and tag us for review. Comments fly back and forth in line with Agile sprints."

Fundamental principles

Leading the design team at the European end of the pipeline is Maria Amidi Nouri, UX Architect and Partner at Ergomania Digital Product Design, based in Budapest, Hungary. As well as managing the Ergomania team, Maria integrates with other European developers, and of course works closely with the Percapita team. Maria says, "We originally were asked to put together a demo prototype when at the time there was no consideration about UX-UI, which of course is at the core of what Ergomania does. However, we knew from the start that the fundamental principle was that everything had to be super accessible. Someone who doesn't know much - or anything - about banking should be able to understand what Percapita is offering."

Percapita's website is also dual language - in English and Spanish - and may one day be also available in Mandarin, although the scope of the company is only within the borders of the USA. "The potential audience for Percapita is huge," says Maria. "It's been great working on a project that is so socially relevant, and so well thought through in how it can help the people who really need help." She draws particular attention to the financial wellness modules, and is also pleased with the way the teams have responded to the challenges of being able to smoothly onboard future channel partners. Although there have been no issues of language misunderstandings, Maria does admit to the challenges of the dual approval process with Percapita and its sponsoring bank, although she admits that's simply 'the name of the game.' So, all good from the Ergomania side of the equation, and it's a project that Maria and her team have a right to be proud of, having helped steer it to the point where the soft launch of Percapita is underway.

Of the Ergomania input, and that of the other designers and developers, Kelly Holmes says, "I think everyone has been great. They're always very responsive, and they definitely take direction wonderfully. They have great ideas and solutions to things that we're trying to solve for the first time, especially with the app. So although the app part is all new to me, they have provided guidance on best practices and better ways of doing things. We may see something one way, and they'll say, 'Well, here's a better user experience.' And it's like, 'Oh, yeh, why didn't we think of that?' But obviously, it's because that's their skill set. I feel like we've had a great working relationship with everyone. They're very responsive, and definitely put all their effort into it, like our own people would do. They're really part of the team."

Your money is your money

As for end users, Melissa Fox says, "We're still in the early stages of getting actual customer feedback, but so far the responses have been positive about the intuitiveness of the app design, and the ease of the account opening process. The positive feedback is not just about the app experience, but the whole customer experience." Melissa says that what Percapita is doing challenges many of the norms in the US market for payday loans, which she describes as something of a 'predatory area'. As she explains about the Earned Wage Access feature, "It's more like an ATM transaction. You are basically withdrawing money from your paycheck as opposed to taking out a loan. That money is directly deducted from your paycheck on payday, and there's no penalty or recourse from a repayment perspective. There's nothing magic about making people wait weeks till payday. If you were to quit today that money would be paid to you, because you've earned it. So this is a mechanism for letting people tap into that - your money is your money."

To understand and appreciate more of Percapita's offering, go to the company website and see how with this digital company, 'Financial wellness is feeling confident about how you manage your day-to-day finances. That's why whether you are looking to support your personal financial journey or help your employees, Percapita is for you!'