Previ wants to deduct personal expenses from your salary using cashback

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Why break bank account when you can go straight to the true source of all consumer spending: a person’s salary? Brandon Rodmanwho founded Weave customer communication platform but left before the company went public last year, founding a new company that aims to get consumers to deduct day-to-day expenses directly from their paycheck.

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Previous connects users who want discounts and ease of payment with partners who want a cheaper way to acquire customers. To further sweeten the collaboration, Previ takes on consumer “risk” and pays its partners on their behalf (and plans to take on a line of credit to fund those payments in the future). In exchange for generating leads, partners pay Previ a fixed commission, and the fixed percentage is returned to the consumer as a cashback benefit.

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The easiest way to understand a startup is to think about incentives. Users have an incentive to pay for persistent transactions more directly with cashback benefits. Partners have an incentive to attract customers in a less costly way, and Previ has an incentive to bet on the loyalty of people who are willing to pay for a service so regularly that they choose automatic payments.

The startup doesn’t charge the interest rates, annual fees, or late fees often associated with credit cards, and Rodman says that won’t change. However, if the user loses their job and salary, Previ plans to withdraw the funds from their bank account. Users are asked to connect to bank accounts upon registration if predetermined purchases exceed their check. Because it is taken from the user’s bank account and not from their paycheck, the user does not benefit from the cashback. However, there is an incentive for the user to reconnect their payroll services when they get their next job to resume cashback incentives.

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Some people think that getting paid is the key to success in fintech, because it creates a stickiness whereby the consumer will conduct every transaction through the winning platform. There are startups looking to get closer to consumer income, including Claire, who offers users receive earned advances for free through integration into HRas well as Pinwheel API Platform for payroll.

Right now, Previ doesn’t work directly with employers to show up as an item on employee pay stubs. Instead, similar to how an employee can put a portion of their check directly into savings or a 401(k) account, Previ is an option where an employee can set aside a fixed portion of their paycheck each time it arrives.

It is a delicate process in which one must be a part. Previ’s biggest problem is human.

“Clearly, trust is key,” he said. “People will tie part of their salary, not all of their salary, but part of it. So they have to trust that we are doing our best to take care of it.”

get consumers to trust them with a source of livelihood. Previ doesn’t have access to the entire salary, just what has been allocated to her, but automatic allocation can still seem intimidating to those unsure of the viability of a pre-seed startup.

And it has a little-known competitor called the credit card. To begin with, Previ’s target users are tech workers between the ages of 25 and 40, a demographic that is notoriously obsessed with credit card scores. Is cashback enough to win the race and score the most points?

“I don’t think we’ll ever replace him,” Rodman said. “We want to be a legitimate alternative – we think about people’s wallets and how broken they are right now, sometimes they use Visa because they go to Costco all the time… but then they have Venmo and a cash account and they have their own Amex… we want to be part of the same conversation.”

So far, investors are fueling this idea. Late last year, Previ raised $6.5 million from Ashton Kutcher’s Sound Ventures, as well as co-founders Qualtrics and Divvy. Other investors include Jared Rodman, co-founder of Weave, Tyler Hogge, senior vice president of product at Divvy, Bryce Roberts, managing director of OATV, and Derek Anderson, who founded Startup Grind and Bevy. Rodman and his wife also invested $2 million of their own capital in the startup.

Previ opens up its waiting list and is slowly recruiting people for its alpha testing with a concierge-like service. The goal is to be in beta before the end of the year.

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