Committed to helping the UK’s hardworking workforce, Karma set out to readdress financial inequality with what it saw as a more ethical form of salary advance. The result is borofree, a game-changing proposition that offers zero interest, zero fees, zero cost to both employees and employers, and zero worries.
And, this now award-winning solution is helping to bridge the gap before payday, without penalty, powered by Modulr.
The new way to advance your pay
Founded after seeing how unethical the financial world can be, Karma strives to solve the debt crisis by helping UK employees to gain financial confidence and transform their relationship with money.
Karma understood that, while for some, life’s unexpected moments - like a flat tyre or a parking ticket - were an inconvenience, for many others they’re intensely stressful. And, when the unexpected happens, financial options are limited, often incurring inflated interest rates and unfair charges. Believing that help shouldn’t come at a premium, Karma was challenged with an idea that was simple in concept yet major in ambition: how could it run a business that charges its customers nothing?
borofree was the answer.
Unlike payday loans and credit cards, borofree gives employees instant access to up to £300 of their salary before payday, for free, through gift cards from the UK’s top retailers, including all the big grocery and delivery chains.
“Essentially, borofree is a pay-as-you-go service. When employees are short of funds at any given time in the month, they have access to up to £300 pounds in the form of vouchers from leading high street retailers so that they can put food on the table, they can ensure that their families have what they need. And they don't have to pay any interest or fees or incur any cost to do so,” explains Darshan Patel, CFO, Karma Technologies.
Advances are capped at £300 so as to instil financial discipline and ensure employees only use what they need. “It’s a small enough component of a salary that it won’t push employees into difficulty but significant enough in terms of covering contingencies, meeting basic needs, and affording a degree of financial security,” explains Darshan.
“What’s more, it’s instant in comparison to other solutions. So, you can look at it this way: we've created an alternate payment ecosystem which bypasses the traditional card payment rails. So basically, it’s a cash-free system and one which, thanks to Modulr, is fully automated,” he adds.
How Modulr helps
With borofree, a secure app allows employees to advance up to £300 of their salary, at any time in the month, through gift cards from over 50 of the UK’s top retailers. Through the app, employees can manage their gift cards in one place, send gift cards to family and friends and track their spending and facilitate repayment effortlessly.
It’s quick, secure, and simple to join and doesn’t need integration with any payroll system, just a commitment from the employer to pay the participating employee’s salary into their individual borofree payment account each month. On payday, borofree automatically collects any advance taken during that pay period and immediately sends the remaining funds onto the employees’ usual bank account.
Unpinning the borofree proposition is Modulr’s unique accounts and payments infrastructure. By leveraging Modulr’s API-driven platform and regulated Electronic Money Institution (EMI) status, Karma can easily create individual accounts for each user and embed automation into its payments processes, making it easy to manage repayments and reconciliation, in real time.
Modulr’s direct participation to the Faster Payments scheme means that payments can be sent and received in seconds, 24/7, with instant notifications for a better customer experience.
“With the help of Modulr, we can give our users full transparency and an instant view of transactions made. Users receive their salary within 30 seconds of their employer making the payroll run, with any advances automatically deducted. You cannot underestimate the amount of comfort that gives hardworking people, that their salaries are paid instantly and in an automated way. It’s just a completely seamless experience,” explains Darshan.
“From an employer's perspective, it’s actually very simple to offer our product. There’s no complex or time-consuming integration, they’re simply providing their employees with financial wellness and financial security, at no cost to them. And employees give back with increased productivity and performance,” he adds.
And why Modulr?
“Well, Modulr was our first choice. The platform delivered what no one else could with its ability to create an unlimited number of accounts and offer a completely automated online, digital journey. Modulr has been a fantastic partner for us. It was the best solution that we could find in the market at the time, and undoubtedly still is. It’s enabled us to design our ecosystem in a way that works seamlessly,” said Darshan.
“And, the feedback we’ve received is that this solution offers a real lifeline. One of our users even said that borofree had saved their Christmas!”