In a PYMNTS podcast, leaders from Ingo Payments and WorkWhile explain how fixing “Bill Pay Roulette” could stabilize workers and economies.
Transcript
This is Wage to Wallet, a podcast by PYMNTS. In collaboration with Ingo Money and WorkWhile, we break down how America's hourly workforce powers the real economy from paycheck to GDP. In this episode, PYMNTS CEO Karen Webster sits down with Ingo Payments CEO Drew Edwards and WorkWhile COO Simon Khalaf to discuss the Wallet Index, Wage Volatility's $14 Billion Consumer Spending Gap.
Karen Webster:Hey Simon, hey Drew, happy 2026. I can't believe I'm saying happy 2026. What happened to 2025? But good year on the horizon. So thanks so much for taking some of your time early in the year to have this chat with me today.
Simon Khalaf:Thanks for having us. You too, Kieran. And happy new year as well.
Karen Webster:It's going to be a great one. The conversation today is about the latest wage to wallet report. And each time we publish this, the data that we get back about this section of the workforce that we call the labor economy is so revealing. And I think it provides such insight about how to look at a portion of the population that does represent sort of the human economy, the workforce that delivers food and groceries, drives trucks, works in restaurants, warehouses, takes care of people in hospitals and care facilities. So it's really the labor economy that we've assembled a data set using workwild data, Ingo Payments data, and PYMNTS data to look at the economic contribution of this workforce to the broader GDP. In this report, we discovered that there's sort of this mirror image economy that we identified where there is the salaried workforce, which is increasingly optimistic, hourly workers, which represent the labor economy, remain pessimistic even though they're employed and they report having very strong job security in the jobs that they currently occupy. So to get us started, Simon and Drew, I want to throw this out to you. What are people missing about this labor economy, salaried work economy that you think is worth having a conversation about? And why isn't having a job good enough to close that gap? Simon, I'll start with you.
Simon Khalaf:Sure. First, uh thanks for having us, uh Karen. And uh we're actually honored to be part of this uh research alongside Ingo Payments. Uh, because honestly, um we're actually looking at a segment that doesn't even get mentioned in the mainstream press. I always look for is there kind of like the C N B C for mainstream? And I cannot find it. Hopefully, this will become the CNBC of mainstream, uh of mainstream. Um I do believe that the reason why we don't talk too much about it stems with math. And and math has averages. I always say that between my housekeeper and Elon Musk combined this year, they did very well. But one of them didn't do well, the other one did extremely well. So the average comes in much, much higher than people think it is. So as you mentioned, there's a massive fault on, right? Uh, in in which the, I'd say the upper 5%, it's not even 10%, the upper 5% are holding uh the economy together, and the bottom 95% are living paycheck to paycheck. Actually, they're borrowing to live paycheck to paycheck. So I think once we expose uh through our means, kind of like the, I wouldn't say the plight, I would say the challenges and opportunities that the labor economy, which makes up a huge percentage of the population, I think once we expose that and remove the what I what I say, the problem with average, and we take that away and we look, we look at this population, which is larger than the population of Germany, you'll get a completely different read from the economy that you would get by by combining the upper 5% with the bottom of the 95%.
Karen Webster:Yeah, and and I think the one thing that people miss about the labor economy is that they are a significant contributor to GDP because all that they earn, they spend. And so what they make is you know is part of um consumption. And when they don't make as much, and we'll talk about wage volatility a little bit later, that shows up too, mostly in the local economies in which uh these people, these people live. So it is a very material impact on on GDP. Drew, your your thoughts on this mirror image phenomenon that we uh that we discovered looking at the data this month.
Drew Edwards:Um sure, this is a subject that, as you know, is near and dear to my heart because we actually started this company as an underbanked service provider focused on the underbanked consumer, which we call today the just-in-time consumer because they're living paycheck to paycheck. Um and in this company today, in Ingo Payments today, out of 250 employees or so, I'm split down the middle. So I have a hundred hourly people in this company and what I call god-awfully expensive technology and and sales and other people on the other side. And so I can feel that um divergence you're talking about. To me, what everybody's missing is they assume that the labor economy, that the hourly worker, that that hundred people, that their plight is because they make poor financial decisions. Um, the facts are people all the way across the income spectrum make poor or good financial decisions and can live paycheck to paycheck. But the particular part that's living hourly versus salary, they tend to be at the bottom of the food chain. They have the least amount of visibility, they have the least amount of control around whether they're gonna keep this job or not, and whether they're gonna get the hours this month that they need to make those bills work. And so it's more of an uncertainty and a blind spot for what I think are very um well-managed financial lives. They just don't have any margin for error. None. Try living on $15 or $20 an hour when it costs you, it costs me and my wife and grandbaby $25 to go to Chick-fil-A. This is this is, you have to work in my call center after taxes for an hour and a half to go eat at Chick-fil-A. And so it's just that's what's so misunderstood. Well, they just need to make better decisions. No, they don't have the same visibility that the salaried guy does. And generally speaking, on the averages, they make less money, but yet Chick-fil-A costs the same for both of us. So timing really matters.
Karen Webster:That's absolutely right. And I think it's it's also the ability to monetize capacity. This is what WorkWild does for this category of worker, it provides a platform for these workers to pick up extra income by aligning their skill set with with demand for their for their skills. And that that certainly helps a lot. But so does actually getting paid on time. And if if you look at the the data from this most recent report, we see that almost half of these labor economy workers missed or delayed a bill, not because they didn't have the money to pay it, but because the timing of their paycheck didn't align with when the bill was due. And I guess the the hard question, Drew, that I'm gonna ask you is at what point does this payment timing mismatch stop being an operational issue and become an economic one that we all have a responsibility to correct?
Drew Edwards:So it's already an economic issue for the receiver, for right, for the worker, for that. And it's a it's it it consumes their financial economic picture. How am I going to pay these bills on time? And it's so odd. Last night, um, my wife and I were watching some movie with Keanu Reeves called Good Fortune, and it was almost like it was about this very situation. It's like a a play on a couple of different old movies, but the the gentleman was gonna get thrown out of his hotel room. He's like, I'm I've got a new job. I start today, can I have till tonight? He worked his butt off all day washing dishes in the kitchen, right? Only to find out at the end of the shift, I don't get paid for two weeks. Right? I don't right. So this timing is so misunderstood, not by the receiver, but by corporations. And then when you layer on the fact that our most favored payment instrument, still to this day in this country, for some reason, is a paper check that is slow and wrought with fraud that wreaks risk on the recipient. It's a major economic issue for the receiver, and it's an economic opportunity for all of the companies that like work while and others out there to create solutions because this consumer, there's value there if you can save them that they will pay for, right? Or that will save them money. I don't know if I'm answering your question, Karen.
Karen Webster:But yeah, and I think I mean what's interesting is the bills, I mean, there is this little what I call bill pay roulette, where you sort of decide what bills you pay and what bills you don't pay. And the prioritization is on remaining employed. So transportation, you know, getting to and from their job. Medical bills are not prioritized. You know, even going late on credit card um bills is is not a priority because you can catch up later. You know, it's it's unfortunate that payment mistiming creates those kinds of forced trade-offs for the labor economy worker. Simon, I'd love you for you to chime in on this particular topic too.
Simon Khalaf:Sure. Uh I think Karen, uh I I I'd say the results are speaking for themselves. Uh we launched real-time pay uh for a lot of workers. We had it for a few, uh, we launched it, and we got to 91% adoption in 11 days. 11 in 11 days. Uh so I mean, if if I look at it, honestly, uh, you look at our economy, uh, the feds are bankrupt, the states are bankrupt, uh, and we expect you know an average salaried salaried individual to balance their economy. The feds are supported by probably 300-400 PhDs, uh, insane amount of economists and mathematicians, and they continuously restructure their debt. I mean, look at treasury bills, and the yield on them changes daily, and it's traded in micro-milliseconds, even, right? And we expect somebody uh to come in and say to balance their economy, which is making sure that what they earn and the time they earn it, plus their ability to borrow, plus investment income, which we will not talk about because most of this labor economy doesn't have investments, should be higher or equal than expenses and debt servers. If this is a very simple formula that the feds didn't get right, the states didn't get right, the cities, definitely my city of San Francisco, doesn't get right. So we cannot expect these people to get right. And timing is a huge element of it, right? So if they're none of them are dying out of hunger, right? It's the debt stack is increasing. Why? Because it's very simple. Because to bridge paycheck to paycheck, they're borrowing at 65% APR, and that is like the the cheapest one. So 65% APR, which means for every dollar, you're costing up 65 cents in interest. So they're actually making uh 35 cents on the dollar, and that's why their debt stack keeps going up. What is my cost as a business? Honestly, I can go borrow at Prime plus 25 bits, which is 6%. Do I need to market up 10x in order to support the entity that is working for me, right? That is what I think that the challenge is. And I agree with Drew 100% that this is like in our economy, we're still talking about paychecks. Paychecks actually, and payroll is a 4,700-year-old construct invented in Mesopotamia. I mean, I've done all the research. Everything in employment when we've inherited, I mean, forget the Egyptians. We inherited it from the Mesopotamians. The first recorded uh payroll check was 4,700 years ago, right? I mean, name one thing other than oxygen, probably water, right, uh, or fire that has survived 4,700 years, right? And we expect us when we're talking about crypto and stable coins and infinite trades and and AGI, we're still most of the United States and 99% of the United States is waiting two weeks to get paid. I mean, honestly, if you do that in the stock market, Wall Street will collapse. Will collapse. I mean, I mean, settlement is in seconds among traders. Imagine if settlement is in 15 days, how can you do day trading? If you can't do day trading, you don't have Wall Street. So I think we're at a point where this is has to become a must. Like as an a company that cannot pay its people daily, should not be a company. It means that it is actually borrowing from its employees at 65%, right, in order to avoid honestly a 6% working capital loan. So I think we're good, we're heading in that direction.
Karen Webster:I I think that there that we are. I think the more companies recognize the burden they're putting on receivers, particularly in the labor economy, um, and the more that there are fintechs like Ingo Payments and what you guys are doing to make that practical, I think that you'll see you'll see change. I mean, certainly there's demand for it. I mean, your 91% shows that Drew has his own data sets for uh instant payment receivers who always choose it when it's available at you know 70, 75 to 85 percent. So there's demand for it. I think there just needs to be the supply on the other side. But but I I wanna I want to go back to what you said about how they how these these workers fill the gap. I mean, yes, they use credit, but they also use what we call sort of social liquidity. They borrow from family or friends, they make partial payments. I mean, that's not sustainable or scalable. And and and and so there needs to be a more holistic scalable solution to avoid these workers having to go back to the same unpredictable well to make ends, to make ends meet, because that's uh maybe a well that won't that won't have water for them at the very moment they uh they need it.
Simon Khalaf:Yeah um I'm I'm happy to take this uh stab at this. You're absolutely right, uh, that historically I would say that there's been so many, I'd say, social, even religious construction uh to help. Uh and and you look at all organized uh communities do have what I would call uh uh kind of like some form of lending uh that has kept folks in the community. You can go into all sorts of religious or social activities. I 100% agree with you, that is not that's not stable and definitely not scalable. So uh and uh we we see that a lot actually, uh, in which people spot each other in the within the communities. And in the United States, I say that immigrants have maintained those traditions and have contributed strongly to the economy. But it's still done with pen and paper, uh, it's still done with with handshakes and and uh I'd say defaults, which are becoming more often create also a cultural issue versus just a financial issue. So there's been a lot of attempts in fintech to create the form of uh social lending or uh or or what have you, those have not actually uh uh materialized or scaled uh because of that the what I what I'd say the ability to to recoup uh the payments uh or have recourse almost non-existent, number one. And number two, from a regulatory perspective, uh they they are extremely hard to enforce. So once you don't have recourse, no recoupment, those are extremely challenging uh to do with technology. However, I would say that um there's a lot of work going on among the fintechs and and among uh uh folks, and and we're doing a lot with with agentic, uh uh, which is the ability to understand what I would say the potential expenses, which is subscriptions, bills, uh, and on the other side, understand and predict labor and labor demand and be able to match those formulas. We are six months away at work while from being able to doing this, which is basically create a map of everything you owe, right, or you will owe, and what your employability is, right? And basically uh we're basically bridging the gap and examples say, hey, look, uh, you've got this $320 students bill coming up on May 17th. Here are the extra ships we have ready for you in order to deliver on that payment without you feeling uh the pinch. I think that's where I'm I'm seeing a lot of activity. And you look also at the BNPL players, they're starting to pro yeah, they're starting to provide some very clever solutions, right? And and on the fly calculate uh the potential debt or lack thereof and be able to underwrite better and honestly underwrite in a way that reverses hyperconsumerism and fosters reduction of debt service, which which I think I mean, I I can name a firm as an example. I'm actually impressed by the work Max and team have done uh the in not drive hyper consumerism, but actually withdraw long loans away from people when they've overspend. I think that's trend is starting to to create i'm not going to call it benevolence but the the encouraging the proper behavior why so you're sacrificing short-term revenue for longer term relationship and prosperity i'm starting to see a lot of that with with the fintechs yeah your your thoughts on that i mean i think you know the idea of transactional credit for you know for uh the population at large but this population in particular to help them bridge the gap between you know the timing issues that we've talked about before and the ability to programmatically divide grocery bills or utility bills into um into more digestible payments is uh is a is a big advance.
Drew Edwards:Drew your thoughts um I was sitting here as I was listening to Simon just thinking about y'all y'all brought up social capital which is a thing in certain ethnicities for sure um Hispanic and Asian that we've seen at least around here but I can't even count on both hands the different forms of transactional credit that these consumers turn to to manage their mismatch and timing right uh whether they're cashing a check or getting a payday loan or letting the bank pay a check knowing it's going to overdraw but their phone will stay on and they'll and they'll deal with that. And there's a very long list of them. When I first started this company it was dominated by thousands of physical payday lenders around our country who were all rated as bad guys. And honestly they were never bad guys they were they were using the technology and the tools at the time to do something better than what the banks were doing which was programmatically overdrawing and maximizing the overdrafts right and that's sort of been replaced a lot by the early wage access and earn wage access crowds that are out there. And even some banks tried to get into it and bring some regulated solutions which the regulators um in my opinion mistakenly snuffed out and they still find ways to solve the transactional gap between this bill that I have today and money that I know I'm gonna have tomorrow but I don't have today right and so there's always this gap and it's not always because they made a they made poor decisions maybe they had an unexpected doctor bill or or tire blowout or transmission problem and they have no margin for error that creates this cascading cycle. So personally I think there's vast alternatives that this community has figured out how to use and it's not that much different than the way SMBs you and I have talked a lot over the years about SMBs and how they manage their cash flow. It's just now consumers especially if they're gig workers working multiple gigs trying to make ends meet where they've got they're playing a game you know we used to have physical bank branches in Atlanta and I I know you've heard this before but for the audience the consumer that would walk in to cash their check they would also bring the bill they were going to pay or the three bills they were going to pay with that check and today they work for this check. Maybe it was at a day labor maybe it was at a construction site maybe they they just stood in line at home or stood outside a Home Depot and got picked up by somebody but they were going to pay their T mobile phone bill because it was going to get turned off and they were going to pay their power bill and I'll be back tomorrow with another check and I and they could tell you which bill it was so they're very astute at trying to map out and keep track and I hope that Simon and them are successful at building AI solutions that can help them manage that because all the solutions like rocket money and and co-pilot money and all they're geared towards the salaried upper end of the spectrum right not the transactional worker. So um I don't know if I've even answered your question but I think um the technology players and entrepreneurs in the market have moved the ball from when I was around 20 years ago with that guy standing across the counter for us, right?
Karen Webster:They've moved the ball but there's a lot more work to do especially given the shift of more and more people working side hustles and working multiple and and and you know your point about managing and navigating which bill to pay and and recognizing that I'm going to pay a late fee but I still have the couple of days between when I need to pay the bill and when I'm getting paid and I know that my phone isn't going to get turned off I'll just get a late fee instead. I mean that's a regressive tax on these labor economy workers because it's the same late fee for someone making what a labor economy worker makes and for someone who's making far, far more. So it is something that needs to be addressed. The technology exists to address it I think we now need to make sure that we're in a situation where we can execute against some of these these these innovations that Simon talked about using agentic and and other technology that helps anticipate when bills are due and reconciles those gaps with shift work and other things that can be transactional credit that can make those lead fees less certainly less onerous Simon I I want to come back to um something we also discovered which is this idea that the hourly workers feel secure in their current job but don't necessarily feel good about finding new work. So it's this sort of safe but stuck mindset.
Simon Khalaf:Your thoughts and how that influences not only worker behavior and their decision making but the employer who who employs these workers yeah I mean uh safe but stuck is an excellent uh uh sentence uh Karen I actually agree uh they feel safer than believe it or not the salaried workers and I think uh uh our uh waitress wallet index reflects that because what they hear in the news is that AI is coming for the white collar job right this is the first time this community is not threatened I mean uh uh first it was hey outsourcing is gonna take your job and most of it is the working class or labor economy then there was immigrants coming and taking your jobs right uh so they've been living in fear like which is mainly created by the media and some reality and some what I call the globalist movement. They actually went after their job so they were not dreaming it. But now if you look at all mainstream media what you hear is AI is coming for my job, your job, the accountant's job, the the the management consultant job, the market researcher job, but it's not coming after uh after the labor economy job. Look, I mean we're gonna get seven Einstein level intelligence in our pocket before a robot can actually fold laundry despite what you see on TV, right? So so that's why they feel better because this is the first time something is coming after the others' jobs and not theirs. But it also sucked because you're you're absolutely right and I think Drew raised the point of stability the feeling right it's a social experiment. Like if I look at work while and I can stand and I if I can show them my algorithm I'm gonna say look my friend there's a 99.6% chance you are going to have a job tomorrow morning. Now is it guaranteed no but honestly name one white collar job in which you have a 99.6% chance that no one is gonna walk and say thank you for your services you're out of here or a manager uh with a 99.6% certainty that an employee is not gonna come and say you know I just got another offer and I'm leaving that does not exist right but because it is hard to open up an algorithm an AI algorithm and show them that's called the social contract that is going to take time for it to materialize I think we're gonna stay in this level of uncertainty we do have to say that 39% right now of our workers are working technically more than 40 hours or 36 plus hours which is defined a full-time equivalent for us that is growing so fast because they're starting to establish this the trust but as as Drew mentioned we still have a lot a lot of work to do to get there sorry true but but the ability to I mean that that's been the wonderful thing about about about these platforms is it provides the ability for people to monetize their spare capacity in a way that makes it you know takes the friction out of what used to be a difficult process in the in the past so I I think you know that's that's that's definitely progress on the supply-demand side but to to wrap our conversation is there something is there a single intervention that you believe would make the difference in trying to align the work that is performed with the payment that these workers need to receive after they've completed their shift that would really create um a more confident and financially confident labor economy worker. Simon I'll start with you yeah uh I I always uh Karen you and I have spoken so many times I always go back to math math is the truth and and what what I mean by that is uh looking at the formula income plus uh plus ability to borrow uh plus investment income has to be higher and equal than expenses plus debt service it's a simple formula that you don't need even large language models to fix you need good data you need good data and you need some form of interception of the transaction as Drew mentioned the labor economy they are not they don't make bad financial decisions they don't they simply make force decisions that forces them to go into that and as we've seen that serves like drugs it keeps going and growing and growing you keep using them and using them right so as an example what if we give uh to our best labor interest three loans why not if we bring like let's say even at cost uh five percent excellent what have we done we brought the deck stack down so their ability to come out of this is much much higher and they will work better they will feel better uh they're not under the stress and they will perform better will generate more revenue so I do believe I do believe that interest free loans offered by a labor marketplace in which you're securitizing the loan without a court order against future work is gonna is honestly gonna shore up this economy. We're willing to do it we're willing to take the risk why because we have enough margin I mean when I was I was gonna say your your your business model has to be able to support that because somebody has to pay for some somebody has to pay something in order for you to be able to correct. However but my default rates are zero right I mean if you look at if you look at the payday loans the default rates are high and that is the highest dogs is my default rate is zero right then I have plenty of room and I'm making it up right from their commitment to continuously work on our platform. So uh uh we're we're very close to this I would say we are testing and and so far so good but you never know you know like any loan construct if you start I I always say if you give free gas people will drive but at some point in time they will be tired and they will stop. So my my point is that I do believe this is something we we'll be able to to to unlock. And I would say the work that the BNPL providers have done and to kind of make their money from the retailers promising increased sales and not charging interest at least for three or four payments gives me hope. And I think we're gonna be able to extend longer term interest free uh uh loans that that can help the this economy and and we will see we will see I'm very optimistic about about uh the uh the role of agentec not because it's kind of like ai no b but I would say it it has a great ability to work on behalf of one entity without screwing the other uh that's why I think it can it can it can actually play a big role into this well it it it it also gives you a more predictable set of data insights and and and and recommendations that you can that you can action but it also it also you know you're borrowing a page from the BNPL business model which you know employer pays you pay the platform has to support the worker who gets the benefit of the subsidy really interesting i'm i'm paying I'm paying in it on behalf of the retailer basically that's what it is it's the employer is paying it on behalf of the retailer but but the worker uh and what I'm getting in return is worker loyalty meaning worker stability worker worker stability which is with supply stability basically yep supply stability for the demand so Drew you have the last word single intervention that's deliver you just tested me to keep see if I can keep from getting political here right I just met Simon and we are public here so maybe I'll keep my my Atlanta Georgia thoughts to myself but I I think whatever innovation comes along for this consumer to just address that it it's gonna get paid for by somebody and hopefully it's not the taxpayer because people need to learn to stand on their own but the um so I there's room there for innovation and expansion and I applaud what Simon uh is trying to do there I also think though Karen there's and we haven't even talked about it today but there's so much waste in the system um that's costing the little guy the most money it is a uh a poor tax as Dan Schulman used to like to say I think right for example when you pay a consumer with a paper check and everybody knows I don't hate paper checks I mean I'm I'm in the business of trying to help consumers get their money from these checks safely but when you when you pay them with any instrument old school payment instrument that has recourse risk built in that has fraud risk built in and you shove that risk to the very consumer that can't afford to take it you're putting them in a position of having to cover the cost of the guy that wrote the check or the guy that stole it out of the mailbox or whatever when that when you move to modern Rails whether that's push a card or RTP and we when we move to real-time ledgering between the fintechs and the banks which is where I think we are now and you eliminate that uh cost of of the check just being bad or the payment getting pulled back or something you've taken at least half of that tax off of that consumer to begin with right there.
Drew Edwards:And then by giving them choices that enable them to manage their cash flows and align their cash flows just like a small business would even if that choice cost a fee, right? You want the money and I mean PayPal and Venmo do this wonderfully right you can have the money tomorrow for free or you can have it right now but there's a fee for that because that's a value added service. That's our capital you're using and it's going to cost us something extra to do it and we need a margin. We're a public company all of that's great. And look at the adoption rate of consumers going this week I'll pay for that. Next week I may not right give me a tool so that I have choices to manage these and that to me is the answer choice. Give them choices that let them manage their financial lives and monetize those choices somewhere other than on the backs of just the little guy right it there's there's improvements in stickiness and loyalty it can be used as a you know buy now pay later is is the new thing but when I was in college I used to get furniture at Rooms2go for 12 months same as cash and it was the same deal. The rooms to go was paying GE capital to do that. And and it was built into the cost of acquisition of a customer loan they would have gone out and and paid $500 to credit karma for a credit card but they could pay the retailer and get a loan right there right so as long as there's an economic formula there where somebody in this food chain is incented to um offer free credit then I'm all for it right or offer choices then I'm all for it. But if you'll as a business if you'll make some of those choices available to any consumer but especially this worker even if they have to pay a little bit for it but it's the best option for them they'll do it and it's good for you right yeah I I I I agree with that.
Karen Webster:I do think that there is there is the ability to monetize value by accelerating payment when there's choice given to the receiver to either decide yes or no to that. And I think you know you and I have talked a lot about you know creating ecosystems and this is where you can think about I mean in in the case of work while monetizing the supply and demand platform that he has where people would be eager to create incentives and offers for that worker to take advantage of promotions at specific retailers or other services that are valuable to them that can also be monetized that offset the cost of delivering service to that to that worker. So business models I think can be The big unlock for creating opportunities for the labor economy. And I think technology gives us an exciting set of tools to activate those kinds of choices and those kinds of operating models for everybody as part of that ecosystem. Simon Drew, thanks so much for a fascinating conversation and for a very hopeful 2026 for the labor economy. Thanks again for your time.
Simon Khalaf:Thank you. Thank you.
Narrator:That's it for this episode of the PYMNTS Podcast, The Thinking Behind the Doing. Conversations with the leaders transforming payments, commerce, and the digital economy. Be sure to follow us on Spotify and Apple Podcasts. You can also catch every episode at Payments.com/ podcasts. Thanks for listening.