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During a previous employment, several years ago, when this glorious time arrived, the secretary in a booming voice declared that the “eagle had landed.” Which our previous month’s working. If one gets paid once per month, it’s a long time between payment, so these initial few days passed a week or so of being broke were awesome. I even recall when I waitressed and collected my little brown packet of cash which was waiting at the end of every week! Today most workers get compensated electronically, but little else has changed. Many people suffer to stretch their money from paycheck to paycheck – a recent study discovered that over half of employees have trouble paying their bills between pay periods, while almost one third said an unexpected expense of less than $500 can make them unable to pay other financial responsibilities. Another study discovered that almost one in three workers runs out of money, even those making over $100,000. 12 million Americans use payday loans each year, and each year $9 billion is paid in payday loan fees. The average annual percentage interest rate (APR) for a payday loans is 300%. According to PayActiv, over $89B are paid in costs by the 90M people struggling paycheck to paycheck, that is two-thirds of the US population. Instant payroll could each year place over $25B into employees accounts, just through savings from abusively high APR fees. The need pushes creation We are on the edge of a new working relationships which has connection with pandemics or shifting workplaces, and lots to do with how people want to receive their payroll. Workers, unable to last between paychecks and tired of turning to high-interest loans to fill the gap, want to access their hard-earned pay as and when wanted. Over 60% of U.S. employees that have struggled financially between pay periods over the last six months know their financial circumstances would improve if their employers allowed them immediate access to their earned pay, free of charge. Of course some people might think this a political point, the truth is it is regarding financial health. According to SHRM, 4 out of 10 employees are unable to pay an unforeseen expense of $400. Their report also refers to Gartner data that discovered that less than 5% of major US companies with a majority of hourly-paid workers use a flexible earned wage access (FEWA) solution, yet it is expected that this will increase to 20% by 2023. Why should a worker need to wait for days or weeks to receive pay for their time and ability? Improving the employee experience Giving workers access to their pay on demand will disrupt, maybe even, deconstruct, the way we receive pay and view our paycheck. Currently the possibility is noticed, also, in many cases, companies are using it to differentiate their company and bring in new talent. As an example, to encourage applications for workers, Rockaway Home Care, a New York care facility, is promoting its flexible payment options on the internet. Immedis Payroll Service are providing on-demand pay – when employees finish a shift, they can receive their money as soon as 3 a.m. the next day. Via an app, employees can transfer their salary to a bank account or debit card. Walmart is yet another example of a business that offers its workers access to their payroll. Employees can access earnings early, up to eight times per year, for free. The feedback from employees is incredible, and Walmart is expecting more and more adoption. Meanwhile, Lyft and Uber each offer their drivers the ability to be paid after they have earned a certain amount. The change of payroll is not confined to the frequency of payments. Venmo, Zelle, and other app provide flexibility and transaction services that employees currently expect from their paycheck. They want to be able to receive their pay whenever they need to, not each 2 weeks or a monthly cycle. Most of this expectation has come from the emerging economy and Millennial generations – they expect to be able to access the money they have earned when they want it. The growing rise of employees without bank accounts In 2018 it was estimated that more than 1.7 billion adults globally don’t have access to a banking relationship. In America, a 2017 survey estimated that 25% of households are either unbanked or underbanked – 7% unbanked and 17% underbanked. The report found that workers who either do not have a bank account, or have an account, but keep using financial services outside the banking system like payday loans to make ends meet. In the UK, there are in excess of one million people without bank accounts. There are many results of having no banking history. In some cases, it can result in difficulty getting financing or buying a house; it also presents companies with specific challenges. How do you process payroll if there is no bank relationship to transfer the money into? As a result, employers are increasingly looking for other ways to process payroll, specifically for hourly paid workers. Some are leveraging pay cards, that are topped-up virtually each time a worker gets paid. These pay cards function the way a debit card does, letting holders to remove cash or shop online. It is clear that on-demand payroll is something that’s going to be part of the banking health conversation for a while ahead.