Covid-19 Heightens Demand for Cashless Payments
Whether it’s a customer tipping a hairstylist or a stylist cashing a salon paycheck, the Covid-19 pandemic has accelerated demand for contact-free digital options. That trend set the stage for two Minneapolis-based tech companies to team up and make digital payment and tipping a new standard for thousands of hair salons.
Salon software developer ProPoint Solutions, which sells a tech product called Super Salon that powers national salon franchises including CostCutters, Fantastic Sams, and Supercuts, implemented fintech services from Branch that will allow salons to pay stylists instantly, paper-free, and without fees for salons or stylists.
“This year we’ve seen increased demand for cashless environments—specifically around tipping,” said Branch CEO Atif Siddiqi (read more about the tech founder on our 2020 Tech 20 list). A high-tech, employee-centric answer to high-cost payday loans, Branch serves more than 300 employers to provide fast payments and paycheck advances to hourly workers. Branch makes money from the Branch debit card interchange, the percentage merchants pay when consumers make a purchase on a credit or debit card. The service is already popular with retail employers and restaurant chains, so Siddiqi said, “We’ve been thinking about what other industries this might apply to.”
ProPoint serves more than 9,000 salons and 80,000 stylists. “Cash flow is paramount right now,” said ProPoint president and CEO Raj Mahajan. “Our industry faces a lot of challenges including stylist retention, and many of them are unbanked [meaning, they are not customers at a financial institution where they could easily cash or deposit wages]. What Branch offers is stylists to get their wages faster, and owners to control cash flow. The reception has been pretty amazing.”
Due to Covid-19, use of contactless and digital payments has increased among 76 percent of hourly workers recently surveyed by Branch.
“We’re trying to solve short term liquidity challenges for hourly workers—particularly as they’re facing additional financial challenges this year. Our mission is helping working Americans grow financially. It’s really gratifying to see that happen.”
How Atif Siddiqi’s effort to simplify scheduling for hourly workers led to his larger mission of improving their financial welfare. Listen to By All Means.