One of the big downsides of being self-employed is trying to get paid what you’re owed on time. You also need to be good at managing money to cope with fluctuations in income and avoid resorting to overdrafts, credit cards and pay day loans to bridge the gap.
Fintech veterans Garrett Cassidy and Flavien Charlon first became aware of these money challenges when working on an idea to apply innovations in consumer banking to small business. From talking to potential customers, however, they quickly realised that financial stability in the gig economy was a far more pressing issue. In 2016, they set up Trezeo to bring their money managing service to market.
Trezeo works by providing subscribers with a regular, defined income. It will also provide emergency cash for unexpected events and will use data analytics and machine learning to identify, encourage and reward good financial behaviour.
The model only works where people are paid by electronic transfer and the company’s first target are self-employed drivers and riders in the UK. Trezeo will be launched to this cohort towards the end of the year.
To enable its service Trezeo will partner with a regulated financial entity such as a bank or e-money business and they will provide the deposit account facilities for Trezeo’s customers. The accounts will be owned by individuals not by Trezeo and subscribers must give Trezeo permission to use their data.
Regular wage
Those using the service have their salary paid directly into their Trezeo-designated account. Based on their earnings, they agree a regular wage and this is paid regardless of fluctuations in income. The idea is that things will balance out between busy and quiet weeks. Having a regular income also means the self-employed can take time off without worrying about their finances.
Trezeo will make its money by charging subscribers a flat fee of 1 per cent of income. There are no other fees and it does not charge interest if a subscriber borrows cash to cope with an unexpected crisis.
“There will be a limit on what people can borrow and we will not advance more than they can afford to repay based on their salary,” says Garrett Cassidy.
“We don’t want to incentivise borrowing. It’s all about offering peace of mind to the self-employed. Yes, someone could do a runner and that’s a risk we have to take. But we will be a regulated lender so we will have normal recourse to the courts to recover a debt, but that’s not really where it’s at for us.”
Finance credentials
Both Cassidy and Charlon come with heavy-duty credentials from the worlds of IT and finance. Cassidy is a computer science graduate with an MBA who has worked for Goldman Sachs, Ulster Bank and Irish VC-backed startup Marrakech. He is a former programme director at Bank of Ireland, he ran the first fintech accelerator at the NDRC and prior to starting Trezeo he was European managing director of peer-to-peer payments technology company, Circle.com.
Charlon is an engineering graduate from the Ecole centrale de Lyon in France. He came to Ireland in 2007 to work at Microsoft and founded pioneering blockchain technology company Coinprism in 2014. He is also the author of the Blockchain Open Assets protocol, used by Nasdaq.
To date, startup costs can be counted more in time and brainpower than money, but the founders have spent about €40,000 in hard cash. This was self-funded with support from Enterprise Ireland. The company is now embarking on a funding round to raise €2 million to build out the business and provide a lump sum to kickstart the Trezeo kitty. The next step is to add more features to the service such a money monitor that will alert subscribers to potential problems such as falling income for example.
