Nigerian HR-tech startup PaidHR has launched a wallet app that enables employees to access and spend their wages without needing to transfer to a bank, marking a significant shift towards fintech-adjacent products. The app, which has processed over ₦1.3 billion ($835,134) in transaction volume monthly, has sparked a debate about the company's venture into fintech.

In an interview with TechCabal in 2024, PaidHR's CEO and co-founder Seye Bandele had denied plans to venture into fintech, despite the company's cross-border payroll product. However, the launch of the wallet app has raised questions about the company's intentions. The app allows employees to keep their wages on the platform, spend on routine expenses like airtime, data, and power bills, and even access earned wage advances.

PaidHR's playbook is not new, as global HR-tech companies like Deel, Remote, and Rippling have followed a similar path – starting with payroll and then embedding financial services to deepen user engagement and drive revenue. Deel offers global payroll with built-in wallets and a Deel Card, enabling cross-border workers to hold and spend earnings. Rippling, which began as an HR platform, now includes corporate cards, expense management, and financial automation. Remote also facilitates multi-currency payments and localized benefits.

The wallet app has triggered a knee-jerk reaction, with some critics labeling it as "yet another startup selling airtime." However, Bandele argues that the app solves a real user pain point, eliminating the need for employees to transfer wages to a bank and incurring additional fees. "Somebody takes an advance of ₦5,000 but ends up with ₦4,700 after charges," Bandele explained. "Then he has to pay more fees just to send it to a bank or Opay. It didn't make sense. We built utility directly into the wallet."

The wallet app has generated passive revenue for PaidHR, with a 2% margin on transaction volume. The company also earns fees on FX and disbursement for cross-border payroll, which can range between 1.5–3% depending on the destination. Additionally, the app allows PaidHR to control float, which can fund earned wage access, effectively recycling employer payroll funds into employee credit without external financing.

Despite the fintech-style revenue mechanics, PaidHR still identifies as an HR company, with subscription fees paid by employers to manage payroll and staff remaining its biggest income stream. However, the lines are starting to blur, with employers funding wallet accounts monthly to run payroll, employees keeping their wages on the platform, and PaidHR capturing margin at every node.

The company is now raising a seed round and looking to expand across Nigeria into other West African countries as well as East Africa. International employers can already pay African staff in dollars or local currency through the platform. The next phase may involve more embedded finance – healthcare, insurance, and transport.

Asked if the wallet or FX rails will eventually overtake subscriptions as the core business, Bandele didn't rule it out. "We'll see," he said. But if the current numbers are any guide, the logic is clear: the more money PaidHR moves, the more it makes. Whether or not it calls itself a fintech.