As Africa’s fintech scene continues to expand, payroll tech is emerging as a key growth area, reshaping how businesses across the continent manage salaries and employee benefits. Once a largely manual process, payroll is being transformed by startups leveraging digital solutions to save time, improve accuracy, and provide added financial flexibility for employees.
Payroll Innovation Catches Investors’ Eye
Africa’s fintech sector is on a record-breaking path, drawing nearly $3 billion in investment last year. This booming interest is now trickling into payroll tech, a sub-sector that helps businesses simplify pay disbursements and empower employees with new financial options. Startups like Nigeria’s Bento Africa and Kenya’s Workpay have stepped up to address challenges African businesses face in managing payroll, from delays in salary processing to issues of regulatory compliance.
Founded in 2019, Bento Africa offers a cloud-based platform that automates payroll and benefits, helping over 900 companies in Nigeria streamline their operations. Bento recently announced expansion into Ghana, Kenya, and Rwanda, with plans to grow into additional markets across Africa. Workpay, based in Nairobi, is another major player that enables small and medium-sized businesses to handle payroll seamlessly across multiple African countries and currencies.
Beyond Paychecks: Earned Wage Access and Financial Flexibility
Payroll tech in Africa isn’t just about making payday easier for employers; it’s transforming financial access for employees as well. With earned wage access (EWA) platforms, employees can access part of their wages before payday, a helpful option for those facing unexpected expenses. Ghana’s Zuberi and Nigeria’s Earnipay are leading the charge in this area, giving employees on-demand access to their earnings.
Julian Owusu, founder of Zuberi, saw the need for flexible salary access after watching colleagues rely on costly loans to make ends meet. Through Zuberi, employees can now draw from their salaries daily, allowing them to cover urgent needs without resorting to high-interest loans. Similarly, Earnipay allows employees to withdraw up to 50% of their accrued earnings at any point in the month, with a small transaction fee. Both companies aim to give employees greater financial control and reduce reliance on traditional payday loans, which often come with exploitative interest rates.
Venture Funding Fuels Growth
The surge in payroll tech has attracted venture capital. Workpay raised $2.1 million in 2020 to expand its reach into West Africa, while Bento and Earnipay have also drawn interest from investors looking to tap into Africa’s fast-growing demand for digital financial solutions. In January 2022, Nigeria’s SeamlessHR, another payroll and HR software provider, secured $10 million to fuel further growth and support more businesses.
The promise of Africa’s cloud computing market, projected to more than double in value over the next few years, has only heightened investor interest. Brendan Dickinson, general partner at venture capital firm Canaan, explained that payroll tech is “a natural fit” for the continent, given the unique needs of its workforce and the potential to improve financial wellness.
Payroll Tech as a Competitive Edge for African Employers
For many companies, offering earned wage access and flexible payroll options is quickly becoming a valuable tool in attracting and retaining talent. Payroll platforms now allow businesses to support employees’ financial well-being in ways that were previously unthinkable. Beyond EWA, many of these platforms provide added benefits like salary-based loans, health insurance, and retirement contributions, giving employees a comprehensive financial toolkit.
As payroll tech gains traction, it could play a vital role in reshaping employment across Africa. With a young, digitally savvy workforce and growing interest in financial wellness, payroll tech startups are well-positioned to make a lasting impact on how businesses operate and how employees manage their finances.
