How can FinTechs and Payroll Providers Enable Better Capabilities to Help Employees Manage and Access their Earned Pay
There have been countless variables for how the “new normal” is impacting this subsector of FinTechs. Digital acceleration has taken place in telehealth, insurance claim scanning, contactless payments and now on-demand pay. Specifically, on-demand pay ensures employees feel safe and empowered with these new digital experiences, including instant-pay apps on mobile devices.
Why on-demand pay, though? The current bi-weekly payroll cycle has failed to timely and financially cover employees’ necessary and unexpected emergency costs. COVID was an awakening for businesses to abandon the antiquated payroll process and migrate to a digital, contactless pay solution which provides employees access to their earned pay and eliminates the typical two-week wait time until payday. Speed and safety are prioritized through digitization which ends up saving everyone valuable time and money. If you can change the cycle of payments — and make the money earned available when it is needed — you can remove the financial stress of waiting.
A daily payment option gives people a lifeline to settle the smaller weekly and monthly shortfalls while giving the employer the peace of mind that their staff is closer to financial stability. Employees are able to go beyond financial wellness with a flexible, simple and compliant instant pay experience. The key is to look for a provider that offers a first-class, full-service experience from the moment the deal is signed through the time the first payment is made to the employee and beyond. On the flip side, selecting an on-demand pay provider with a self-service model shifts the burden to your payroll / HR teams and is likely to result in extensive costs.
In a time when financial wellness is top-of-mind for mostly everyone, it’s imperative employers properly equip workers with benefits like financial flexibility. During COVID-19 we learned many valuable lessons – including the need to save for unexpected medical emergencies. According to a recent survey conducted by DailyPay and Funding Our Future, one positive effect that has resulted from the pandemic is that more American workers are motivated to save money for the future. In fact, the survey found that, as they emerge from the global pandemic, 51% of those polled are more likely to save for the future.
To help encourage savings and ensure that we provide employees with a customized user experience, we recently rolled out additional ways to save on our revolutionary PayEx platform. DailyPay is an on-demand pay provider that offers users multiple ways to save, which ultimately provides users with more than just financial flexibility, it provides them with peace of mind. To note, 90% of users were less stressed during the global pandemic because of having the on-demand pay benefit.
Not only are you offering a lifeline for your employees, on-demand pay becomes a strategic differentiator in hiring and a key to reducing employee turnover. As many industries compete for the same workers in the same labor pool, offering cost-saving benefits that are attractive to those looking to re-enter the workforce will be a critical consideration.
Fintech companies can empower employees with the ability to harness the power of their pay and increase their financial security through a customized savings experience. It is important, however, to distinguish between different providers given the recent boom in the industry. When choosing a provider, there are many factors to consider within the entire ecosystem: the product itself, the funding experience, the data security, the customer support, the flexibility or limitations that come with different models – just to name a few.