According to International Labour Organization data, every year million workers travel abroad for employment. Those people leave their countries for jobs in industries such as seafaring, construction and agriculture to provide a better life for their relatives.
However, being away from their domestic jurisdiction and financial infrastructure face migrant workers' different challenges, including what is probably the most important: how to get paid. This could be a problem for companies too. Let’s imagine administering payments for workers hailing from multiple different locations, many of whom are in temporary or short-term placements.
And it’s a problem that German startup Kadmos is setting out to tackle with an end-to-end platform that helps employers remove the friction and many of the costs associated with paying their cross-border workforce.
About Kadmos: How to Pay and Get Paid
Founded in 2021 by Justus Schmueser and Sasha Makarovych, the startup was launched with the goal to tackle the restrictions placed on the financial freedom of cross-border employees. Using modern financial technology, the startup allows migrant workers to have a streamlined salary experience, just as they would expect working in their home country.
“Employees need to wait days or weeks for their hard-earned salaries to reach their families and are then forced into paying exorbitant transaction fees or have to carry large sums of cash at their own risk”, explained Justus Schmueser, Kadmos co-founder, at 30th SMM Hamburg.
How Kadmos Works
For employers, Kadmos provides a centralized salary payments platform for making and tracking payments, regardless of from where the worker hails. Digitalizing the payment process means the funds can be kept in secure currencies within the Kadmos app, ensuring low transaction fees and market-leading foreign exchange rates. This ensures workers keep more of their salary when they send money home. Kadmos also provides workers with their own debit card that is tied to their digital wallet.
Companies can automatically add their seafarers to the payment platform through API-integrations with various crewing software. This results in employers drastically cutting expenses and administrative work, and employees significantly saving and keeping more of their salaries, due to market leading foreign exchange rates and low transaction fees. Employees no longer need to manage bank information, while seafarers get paid instantly, and can access their money on-demand via debit cards, tied to e-wallet accounts and accepted everywhere.
Another advantage for both parties is the Employee payroll self-service; employees can decide when and where to send their salaries, while the number of inquiries to the accounting department of the employer decreases. Additionally, Kadmos offers 24/7 live support to its users, who no longer need to contact their employer when they have any questions regarding salaries.
Kadmos Latest News
With a focus on blue-collar migrant workers and an initial foothold in the shipping industry, Kadmos, after a €29 million Series A funding secured last year, plans to move into verticals with similar salary payment structures such as the construction industry, healthcare, and hospitality.
In March 2023, Kadmos announced its first local wallet integration with GCash, the Filipino leading mobile wallet and payment service. With this partnership, the Berlin-based app is leveraging GCash's capability to allow companies to pay salaries to their employees, supporting their families from afar, even faster.
On May 3rd 2023, Kadmos launched KadPay, a free instant payment service between Kadmos users. A wallet to wallet solution meant to transfer funds to other Kadmos customers without any transaction fees.
KadPay is based on unique QR codes or payments links that are generated by the Kadmos app when initiating a payment. It is meant to make life easier to seafarers, that need to exchange money with fellow crew members for various reasons.
A Fintech With B2B2C approach
Kadmos combines many of the benefits of a digital bank, in addition to cross-border payment features or remittance platforms features. “Kadmos’ approach can be classified as B2B2C”, Schmueser said. “In this sense, our scalability and cost of acquisition is much more efficient since obtaining a few different employers who use Kadmos to pay their employees can lead to thousands of new end-users for the Kadmos app”.
We aim to revolutionize the salary payment experience of millions of migrant workers. “We want to make the payment process easier for companies, and at the same time make the process of receiving and spending that money easier for the workers as well,” Schmueser added. “Kadmos’ focus is really on using technology to provide a solution to the severe restrictions placed on the financial freedom of cross-border employees.”
Digitalization of salary payments is not simply reducing costs; it plays an essential role in improving seafarers well-being by providing financial independence and making their daily life easier. Better salary payments provide security and transparency.
This does, of course, mean that workers will likely have to transfer money frequently, either when they’re spending it, or sending it home. And this is where Kadmos’ sub-1% markup enters the fray, which Makarovych says compares favourably to the typical 1.5-4.5% that traditional banks may charge. So if they use their debit card to spend dollars / euros in a country with a different currency, they will automatically be charged at the Kadmos rate.
