Staffing Industry Spotlight: Atif Siddiqi, Founder and CEO of Branch

In this edition of Staffing Industry Spotlight (sponsored by Ascen, an all-in-one employer of record and back office for staffing companies), we feature Atif Siddiqi, Founder and CEO of Branch, a workforce payments platform revolutionizing how workers get paid. Atif shares Branch’s journey from shift management to financial services, why instant payments are a game-changer for staffing and gig workers, and how flexible pay options improve retention and productivity. He also dives into the challenges many workers face with traditional banking and how Branch is bridging the gap with digital solutions.

Francis Larson (Ascen): To start, Atif, thank you so much for being in the Staffing Industry Spotlight. First off, we'd like to know who you are and what you do.

Atif Siddiqi (Branch): I’m the founder and CEO of Branch. Branch is a leading workforce payments platform that delivers faster, more flexible payment options. So whether it's sending earnings to employees or contractors, companies choose Branch because they know faster pay can really help strengthen worker loyalty, save time and money, and drive business growth. I'm happy to dive into more.

Francis Larson (Ascen): I'm curious about how you ended up founding a payments company, especially on the contingent workforce side. How did you get into this?

Atif Siddiqi (Branch): Yeah, it's the circuitous journey to product-market fit. With Branch, it wasn't initially focused on payments. I think the core mission has been the same, which is we wanted to find ways to help working Americans grow financially. When we first started, it was more focused around helping them earn more income at their place of work. So think of large retailers, all those people calling off, the very manual, analog process to pick up additional shifts, you know, it's call trees, it's pieces of paper on the back walls. We initially started there, but within one or two years into the journey, we kept peeling back the layers of, you know, why are these workers looking for more income in the first place? And that's when we discovered some of the financial challenges these workers face with financial instability. Their hours fluctuated, so in turn, their pay did, and it made it very hard for them to manage their financial lives. One of our strengths was that we were plugged into systems of record, especially along the HR tech stack: payroll, workforce management. And so we had a lot of real-time data on what workers were earning, how much they made, and when they showed up to work. When we first thought of the idea of Branch, we really just did it as a test. We thought, "Hey, how about we push money that workers have already earned to them if they need it, and see if they pay it back?" And they did. We've kind of refined it over time to handle many different worker use cases, payout use cases, and many different frequencies and modes of payment.

Francis Larson (Ascen): It sounds like you started off doing something similar to earned wage access, like sort of a loan. Is that how it started and then migrated from there?

Atif Siddiqi (Branch): Yeah, so the first product that we launched in payments was around earned wage access. A W2 worker can tap into a portion of what they've earned on demand and when they need it. I think one of the key differentiators for us that we thought about early on was, you know, we really wanted to get to a model that was, at the end of the day, equitable for the worker. And so what we did was we put a digital wallet at the core of the product, which allowed us to push funds to workers day, night, or weekends, and also do it for free. More importantly, it allowed us a business model where we could monetize off of interchange revenue. So if they found value in the product as a banking product and went out and swiped and purchased, you know, from merchants, we made it from the merchant alongside Mastercard.

Francis Larson (Ascen): I'm very curious, we see this a lot, where there are a lot of workers who don't have bank accounts for various reasons. We're not exactly sure why they don't. Sometimes it seems like they have bank accounts and they've been shut down. Sometimes they are denied bank accounts. Some just never have used bank accounts, or maybe they have statuses that make it difficult, like immigration status. Can you talk about that?

Atif Siddiqi (Branch): So maybe to dive into a little bit about why a worker can't get a bank account. There are a couple of reasons. One, if you look at worker types, some might not pass the Know Your Customer (KYC) process, which most banks require to set up a bank account. And so this could be minor workers. Oftentimes employers become the first entry point for financial services for these types of workers. They can offer them a pay card to get them set up with less rigor on the KYC side. The other is international workers, seasonal employees, who might not have as much documentation around, again, getting into the traditional banking system. It could be people who move a lot. When you do a KYC, you typically ask for a primary residence and check it against that. And if you're moving quite a bit, you won't be able to pass. And then probably last, as you mentioned, they could have had problems with checking accounts in the past and just fallen out of the system. They may have relied on paper checks to get their pay, whereas now there are options like what we offer at Branch where you can get it on a pay card and get your funds digitally.

Francis Larson (Ascen): Yeah, it seems like there are just lots of different scenarios. Losing the checking account, I think, is really interesting. We've seen cases where someone’s balance will go negative for some reason. If you're in a precarious financial situation, you get a car issue, some big costs that you have to deal with, and then suddenly they have no money, it's negative, and then the bank closes their account. It sounds like it's a mix of things. So, your background, were you in the payment space before Branch?

Atif Siddiqi (Branch): No, prior to Branch, I had no payments experience. This is my first foray into FinTech. I've just assembled a really great team that does have a lot of payments background and experience around me. But yeah, it kind of gave us a fresh perspective, too, on what's possible with the product and how we can deliver really great experiences for workers if we just rethink the system from the ground up.

Francis Larson (Ascen): Yeah, that makes sense. And it makes sense why, I mean, I guess that leads into the next question. Your strategy at Branch, from our perspective, is you've been going really to the employer or to the payer, instead of where a lot of these like new banks will go direct to consumer. You know, the Chimes of the world, they'll market directly. You haven't seemed to have done that. Can you talk about how you came to that, or did you just happen upon that? Was that a really intentional thing?

Atif Siddiqi (Branch): Yeah, it was intentional. It's a B2B2C model. To get on the platform, you come in through a place of work, be it an employer or a marketplace if you're an independent contractor. One of the reasons we felt like that was a good entry point for Branch is that we could provide just a great financial experience to the worker, meaning we can get their pay to them as quickly as possible. Or again, if they're getting it through a paper check, we can get it to them digitally, on time, reliably. And I think the other thing we found was that we were adding, from an employer perspective, their traditional payment methods were oftentimes slow, costly, and disjointed. The big need from employers is that when dealing with tight labor markets, they were competing for workers, and they viewed Branch as a way to differentiate themselves out in the market against their competitors. So yeah, it's been a great way for us to really kind of wedge in with this idea of financial services and faster payments. And over time, what we do see is that workers often find us as a great primary account or alternative to their existing institution. And so we do get top of wallet share over time as people continue to use the product and see what we can offer as a great checking experience.

Francis Larson (Ascen): Yeah, well, let's talk about wallet share. You have the paycheck. That's the holy grail of the neo-banks. The thesis was that if you're sitting upstream to a recurring deposit, you're naturally just going to get great rates of engagement.

Atif Siddiqi (Branch): Right. People want to see when they get paid, how often they get paid, and then use the account. A lot of our focus now is, all right, what are some of the other financial services that we can continue to add to the product outside of just faster payments? Things like, you know, helping them with savings goals. It's really focused rewards on different worker personas that are really relevant to them where they have high expenses. So, for example, a new driver has high expenses with gas. We're able to work with Uber to get them 6-10% back on gas, get the money right. You know, it allows them to kind of grow financially. Yeah, and we're looking at a lot of these additional experiences, too. How do you continue to work alongside the worker along their financial life? You know, we got them paid faster. What are some other things that they're working on? A big one that comes up is, how do we help them build credit or at least get into the system? A lot of these workers are credit invisible. They just don't have a score. And so just, yeah, greater access to mainstream financial services is definitely a focus for us going forward.

Francis Larson (Ascen): Do you have lending products, like a credit card or other types of lending?

Atif Siddiqi (Branch): Yeah, I think it's more around giving them insights into where their credit is today and credit products that don't put them into a sort of debt burden.

Francis Larson (Ascen): And that could kind of help them grow over time. Right. If you have bad credit, you're really locked out of a lot of the American system. You're kind of locked out if you're trying to get an apartment.

Atif Siddiqi (Branch): Yeah, totally. Most of us don't think about that. You're really locked out of the mainstream financial services. It's the difference between putting, you know, if you have that credit, like putting three months' worth of rent deposit down when you go lease a place. Getting a cell phone plan is challenging. You have to put more money up front. And so it definitely unlocks greater financial stability as you help build up.

Francis Larson (Ascen): Yeah, the lease thing is so interesting. Let's say you're young. You mentioned minors coming into the product. If you start off with low credit just because you're young, then you have one payment and you're late on your credit card. Okay, now you're young, you already had low credit, now you're blocked out of getting a lease. Now you're subleasing, now you don't show up on the KYC, and it's like this spiral with these folks. And suddenly, they have a hard time interacting with the system, and maybe they get defeatist about it. And that's why it's nice that they can get something like Branch. Do you primarily see the Branch take-up in the gig economy, or are you starting to get into other areas? There are drivers, delivery people, things like that. Has that been the focus, or do you think it's really for any kind of employment? Do you see certain industries where there's more take-up than others?

Atif Siddiqi (Branch): Yeah, I think with the focus on B2B to get workers on the platform, we've traditionally focused on high-turnover industries: hospitality, healthcare, business services, gig marketplaces, and staffing is another one. A big reason for that is they're looking to Branch to help attract and retain talent and differentiate out in the market. We've also seen some compelling data that workers that use a system like Branch work longer. They're more productive, meaning that knowing if they can get paid after a shift, they end up taking more shifts as well. So that's definitely been the focus, but yeah, in terms of worker type, it's both across W2 and 1099. We've seen some great sort of tailwinds in the 1099 space as more companies and different industries are looking for more contingent labor and independent contractors to fill demand. One of the biggest growth areas for us has been in the healthcare space with nursing. So if you look at the nursing shortage coming out of the pandemic, a lot of these facilities are looking for 1099 labor and nurses to kind of fill those needs.

Francis Larson (Ascen): Do you see many of the platforms starting to offer Branch like as their only way to pay?

Atif Siddiqi (Branch): No, I think at the end of the day, we want to make sure we give workers flexibility and options. So, one of the things that we've done actually is, in addition to a wallet where a worker can get funds for free anytime, day or weekends, we've also had a way for them, if they want to just get it to an existing account, they can do that as well. I think our thesis has always been, let's just give workers more flexibility and let them decide what's right for them.

Francis Larson (Ascen): Yeah, that's interesting. For W2 employers, there's this rule that you can't force the user to use a certain form of payment if they're W2. So it's good that you have that in mind.

Atif Siddiqi (Branch): Yeah, definitely.

Francis Larson (Ascen): Yeah, so one of the things, you know, I was surprised about talking to you, is that Branch is a big company now. You've raised a lot of money. You've got a big sales force. And I was really surprised about the focus on hospitality and tips. And it sounded like that was a really big area. Do you think there's something about those types of workers and tips?

Atif Siddiqi (Branch): Yeah, we got into the tips space very organically. We were working with a lot of service restaurants that were doing their own delivery. And, one of the, they were using us for earned wage access for their W2 workers. And one of the big needs they had was that there just wasn't cash at the end of the day to tip out their workers. And so they actually turned to us and said, "Hey, can we use your wallet as a way to kind of push funds to workers instantly?" And the benefit with the wallet was they could push funds at nighttime, outside the normal banking hours. They could push it on weekends. And as you would imagine, when faced with the decision whether you want to get your tips every two weeks on your paycheck or you want them instantly, we just have really high take rates. People say, "Yeah, you know, I work this job because I depend on these tips. I want to get them every day." And yeah, it's been a great way for us to kind of continue to grow in the tip space from quick-service restaurants. We moved into full-service restaurants where, again, a big portion of a worker's income is tips, tip-outs. It's been a great use case for us, a very, I would say, hair-on-fire problem for a lot of these companies. You know, when we hear stories, managers are having to run to ATMs to get cash, or they're having armored trucks come in with thousands of dollars that they have to manage at the facility, which is a high risk. And so yeah, it's been a good win for us to allow them to do that digitally.

Francis Larson (Ascen): Where do you think the future is going with payment cards and Branch? What are the challenges that lay ahead for companies like Branch that are in this space?

Atif Siddiqi (Branch): Yeah, I mean, one, I think there's just a broader shift, like digitalization of financial services. And there are a number of advancements, companies like ourselves, that have made it easier for companies to deliver that. Meaning, you know, we've allowed embedded solutions. We have APIs to send data, you know, disbursements to existing platforms. For us, I think, you know, when we think of constraints to maybe growth, it's largely around, can we get reliable data in real time? And typically that's, you know, how much does a worker make, how often did they work? And so a lot of focus that we put into is just unlocking that data. If you think about it, traditionally it's siloed in these HR systems. Some of those are easier to work with and send data, some are not. And so unlocking that data, I think, is a big focus for a lot of companies like Branch.

Francis Larson (Ascen): Yeah, like a deeper, I guess, maybe deeper integrations with the systems of record to get a fuller picture. Taking a step back in a way, pay cards, like payroll debit cards and Branch, are not the same thing. There's a company called Rapid that does pay cards, plus a few others. you think those are fundamentally different?

Atif Siddiqi (Branch): Yeah, there's a unique distinction between a debit card and a pay card. Oftentimes, pay cards have sort of restricted flows. Traditional legacy pay cards also are more fee-laden. There are inactivity fees, there are huge fees for replacing a card, even checking your balance, just normal things that we take for granted that are free as a banking customer. A debit card really opens it up more to give more of a modern banking experience. It's less restricted access. We do see an important distinction there, but there are companies that use both. Again, the challenge is if you can't verify somebody for a traditional banking account, you can give them a pay card to start off and then work their way to a debit card over time.

Francis Larson (Ascen): So, you know, talk about restrictions. There's a competitor of yours, they're part of a big payroll company, and they make you safelist who can send you money. We've had employers use this famous card, and if they don't safelist our company, they can't receive money. So the person gets a card, but it's not really a bank account.

Atif Siddiqi (Branch): Right. Yeah, and I think that's been a nice thing of us, you know, entering this space around faster payments, but also finding value and just, again, banking the individual and getting them into the traditional banking system so they can unlock other financial services as well.

Francis Larson (Ascen): Well, Atif, thank you for being on the series. I think this is a huge area. We see a ton of the platforms offering same-day pay, daily pay, on the card. The uptake is just remarkable, especially on the tech-forward platforms. So it makes sense why you are growing as fast as you are.

Atif Siddiqi (Branch): All right. Thank you for having me on. This has been great.