NEW REPORT: Pushing Payroll To The Unbanked

Unemployment rates are at an 18-year low, but the majority of employed Americans are still reportedly living paycheck-to-paycheck.

These conditions have created a market in which paying employees on time is now more important than ever, but failing to do so can cost them big. According to recent research, making even one or two errors on a paycheck could inspire an astounding 49 percent of workers to look for a new job.

The February Disbursements Tracker™ charts the latest research and headlines on how companies are exploring ways to get everyone — from employees to gamblers — paid fast.

Around the Disbursements world

It appears different markets are betting big on payment cards.

Sky Betting & Gambling doesn’t want gamblers to have to wait to access their cash. When good luck turns into good cash, a gambler typically has to wait two to five days to access his winnings. A collaboration featuring the British online gambling company, Barclays and Vocalink is now bringing instant payouts to Barclays debit cards.

Meanwhile, those who take a gamble on living the freelancing lifestyle have also been clamoring for faster payment. What’s more, many gig workers said having this need met would prompt them to do more freelancing work. To solve this, pay solutions firm Wirecard and on-demand freelancing platform Moonrise recently teamed up to create a payment solution allowing gig workers to receive their compensation on payment cards within 24 hours of job completion — and with no fees.

Similarly, Walmart recently partnered with online advanced lending platform Even Financial to allow employees access to their already-earned wages before payday. The tool isn’t just about stopgap measures, though, as Even CEO John Schlossberg told PYMNTS in a recent interview. It also comes with features and tools designed to promote long-term financial health.

And, among those seeking a better way to pay employees — without either employers or workers banging their heads against the wall — one oft-voiced solution is payroll cards. The February Disbursements Tracker™ includes a Deep Dive examining this solution, what promise it holds, where it may come up short and what card providers can do to extend the most value from such offerings.

Direct deposit to the unbanked

Paper check pain points are well-known, and their reputation is well-deserved.

Issues with the legacy payment method have hit employers and employees. Workers may find themselves forced to take out loans while waiting for the money they earned to arrive in the mail, then lose chunks of their wages to check cashers. Meanwhile, companies struggle with an unwieldy and costly payroll system. But a cheaper, more digital future isn’t always as easy as asking employees for their direct deposit information. When workers are unbanked, their employers need new strategies to ease the payroll pain.

That’s where organizations like the nonprofit-owned WiseWage step in. In this issue’s feature story, Adam Rust, the company’s managing director, spoke to PYMNTS about how the group works to connect companies and employees with the solution that’s right for them, whether that’s payroll cards or carefully curated debit cards.

About the Tracker

The Disbursements Tracker™, powered by Ingo Money, is your go-to resource for staying up to date on a month-by-month basis on the trends and changes in the digital disbursement space.


Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.


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