Just like businesses are trying to secure financial life-lines, consumers who have early access to pay are tapping it more readily in the world of COVID-19 concerns, according to Jeanniey Mullen, chief innovation officer at DailyPay, a fintech company based in New York City.
“We have definitely seen more businesses realize the value of the daily pay benefit. Some businesses that were in the process of getting set up with DailyPay asked to expedite the process so their employees could leverage the benefit during the height of the pandemic,” Mullen told Talk Business & Politics.
DailyPay offers users the ability to tap some of their wages or earnings ahead of the normal payday.
She said DailyPay has seen total users spike to a 43% usage rate this past week, which was up 400% from the prior week, as government shutdowns started to be put into place.
DailyPay has a client base of 2 million people.
Mullen said as consumers have stocked up on their supplies, the usage number has subsided to around 20% more than normal.
“As we approach the end of the month, we’re starting to see more people needing to access their funds early to pay upcoming bills, which could lead to another increase,” she said.
Mullen said usage has decreased among its hospitality clients as many of the workers have been displaced and are now filing for unemployment.
Independent contractors who provide ride-sharing services or food delivery and retail workers are among the groups getting more hours and are now able to tap the service more often.
Walmart said Wednesday it is making early-pay access available to hourly workers through June with no transaction costs.
“In this unprecedented time, associates have asked for earlier access to their wages, so they can continue to plan and focus their time and energy where it matters most – on their safety and the safety of their families. By providing instant access to earnings every week, this new option will help provide more cash in hand for associates sooner than the normal two-week pay period,” said Dacona Smith, Chief Operating Officer for Walmart U.S.
Smith said the service also comes with a third-party mobile app that offers financial wellness tips to help with budgeting and saving.
He said employees who use the service can get up to 50% of their earned wages on a weekly basis.
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