Walmart’s Early Pay Sizzles While Munchee’s ICO Bites The Dust

In this space we have highlighted the need to “Kill the Check” through a number of interviews with Ingo Money CEO Drew Edwards. And driving a nail into the paper coffin has some real benefits — the most obvious one would be the literal abandonment of paper, where processing costs are as high as $10 a check.  That’s money out the door for companies just to send money out the door.

Businesses who kill the check have better visibility into cash flow, as checks do not sit around in desk drawers for months.

“Push payments” have value in the movement of funds directly to workers who have — well, worked — and who do not necessarily want to wait for the pay cycle to end in order for direct deposit to show up.  In other words, just as companies do, individuals can align cash flow more closely with actual expenses, matching funds that come in with the needs for funds to go out — and possibly saving a little something on the side.

So it is that Walmart, which has proven that it has been a staunch advocate of adopting technology to push ever-farther into the digital transaction arena, said earlier this week that it is partnering with two FinTechs to let U.S. workers get salary paid out ahead of an actual payday.

The mechanics are thus:  The firm has linked with Even Responsible Finance and PayActiv, which in turn let workers get several drawdowns of salary ahead of the payouts that are scheduled.  The reason?  Bloomberg said that the retailing behemoth wants to help workers skirt payday lenders or the financial pain of bouncing checks.  Users can do the drawdown eight times (using what are known as Instapays) for free and then in subsequent use, fees are levied across a personal finance app available through Even.

The app links Walmart’s payroll system to the individual’s prepaid cards or bank accounts.

Walmart has said that the overarching theme is to promote financial well-being, ostensibly helping workers avoid cash crunches.

Much has been made in the wake of the announcement that the access to wages on an in-demand basis does not solve a key issue — namely that, according to some critics, the wages are too low in the first place (the starting wage is $9 an hour, $1.75 above minimum wage).  The average wage, according to The New York Times, stands at just under $14 hourly.

Irreversible and instantly usable funds mean that the paycheck to paycheck continuum is a little more visible. As noted over the summer, a report from CareerBuilder said that 78 percent of full time workers say they live paycheck to paycheck, and even people making more than $100K annually are having trouble making ends meet.

So why a sizzle?  We take a page from earlier discussions in the Ingo series, where debit transactions are sent, irreversibly, over rails already in place.  Push payments, said Edwards earlier this year, have trillions of dollars in promise — and as he told Karen Webster, “when that promise comes to fruition, it will be in a world where consumers can instantly accept wages, personal payments, loans” and all manner of funds into the accounts of their choosing.

Sizzle

Honest finance: $200M is a lot of affirmation, and Affirm got precisely that amount of money from a consortium of investors.  CEO Max Levchin tells PYMNTS that point of sale lending is poised to take off, with ancillary efforts in financial education — let’s call it “keeping your finances honest.”  Users will connect with apps that help determine what future cash flow looks like and help consumers avoid debt pitfalls.

Subscription music:  We’re a long way from Napster and file sharing.  The  $400M bid from Apple to buy Shazam makes it easier to hear a song, stream a song and buy a subscription.  Shazam has a number of algorithms in place that will dovetail with Siri to find songs and artists you like, eyeing AR technology.

One click checkout: The inventors of one click — Amazon — have taken it to a whole new level … with a swipe of the finger, literally.  The swipe is part of a large scale test by the eCommerce giant.  Half of users have been seeing the feature: the 1 click checkout done via swipe, with a finger slid across the screen.  The test shows promise, and helps avoid the “accidental” click.

Fizzle

Shipping deadlines:  Tough sledding, literally, for holiday gifts to arrive on time? Christmas Eve is on a Sunday this year, and retailers are pushing up shipping deadlines in an effort to try to avoid a glut in the mail. Dec. 19^th is the new deadline, which means that time is running out for Santa’s sleigh to load up, and stragglers may miss getting their beloveds’ items delivered on time.

ATM hacks: Hackers have targeted Russian and U.S. banks, pilfering $10 million over the past year at ATMs.  The attacks may still be ongoing.  Interbank transfer systems are thus rather spotty in terms of security.  Call it Russian meddling of a different sort.

ICOs: The SEC blocks the ICO for restaurant app Munchee, where the $15 million offering has now bitten the dust.  The move indicates ever greater scrutiny of the offerings.  The ICO had looked to fund a payment system geared toward restaurant reviews.  The SEC stated that the tokens were being touted by the company that they would rise in value — a no-no in the regulatory world.