Fintech Zoom Article by Jason Lee, CEO of DailyPay

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CHANGING PAY CHANGES EVERYTHING

by JASON LEE

— November 6, 2020

in Hot Topic

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CHANGING PAY CHANGES EVERYTHING

The global pandemic was a wake-up call for companies nationwide. It was a time of realization for antiquated business processes. On the top of the list was “pay.” Not just the delivery of it, but the entire pay experience. And within months, we saw employers of all shapes and sizes adopting a new way to pay called on-demand pay (and sometimes earned wage access). And once they offered this benefit, these businesses realized reduced turnover, increased productivity and a more engaged, satisfied and financially secure workforce.

One expansive effect of this health crisis is the realization that life happens between paydays — especially when faced with needing cash to buy medicine, food or other necessities. It is no longer a viable option to expect your employees to wait every two or even four weeks to have access to the money they’ve earned.

PAYROLL HASN’T CHANGED SINCE WORLD WAR II THE DAWN OF TIME  NEW

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For centuries, payroll has always revolved around employers and when they decide it is most efficient to pay their employees.

During World War II, to prevent the inflation the U.S. had seen after World I, FDR requested that employers switch to a biweekly pay schedule. This was done to limit the cash Americans had at any point in time, to curb inflation. And employers chose to do the patriotic thing and so they moved to biweekly pay.

50 years later, I was ordering pizza and I realized that this guideline no longer met the best interest of the American worker. it was so arbitrary that hard-working Americans, like my pizza delivery guy, had to wait until a designated payday to access the money already earned. I took a hard look at the entire landscape of how people were paid in this country, and I saw a clear need for transformation.

The antiquated way we pay people no longer works. Not for gig workers, millennials, or even what we know today as essential workers. The system that allows employers to arbitrarily decide when payday occurs no longer works for most employees, and perhaps never has. As a result, many employees desperate to make ends meet seek highly inferior alternatives, like incurring overdraft fees or taking out payday loans, to address the gaps caused by that system’s failure.

I decided to be the change for pay and haven’t looked back since.

THE BIRTH OF A NEW INDUSTRY In 2015 my team and I invented a radically new experience for both the employee and the employer. We call it DailyPay. For the first time, the employee could decide when payday is by having access to their earned-pay whenever they want it, all by simply pressing a button on their phone.

On-demand pay gives every employee both choice and control over their financial security. They have complete control over their pay. They can see what they earn in real-time, they have access to their net earnings to pay bills on time, they can save from their earnings by directly routing it into their savings account — all before the traditional “payday” arrives.

From the employer’s standpoint, the benefits are phenomenal. They now have a radically engaged workforce. When you put employees at the center of the pay experience, they start behaving differently. For starters, they stay longer. Our employer partners report an average increase in retention of 45%. Employees are also more engaged, more likely to pick up extra shifts, and less likely to skip work. By being able to pay bills on time, they feel empowerment over their finances and are less stressed about money-related issues at work, making them more focused and productive. More importantly, this is all accomplished without changing a single thing about the employer’s payroll process.

Providing The Gold Standard In Full Service In the past 5 years, DailyPay has not just transformed financial stability for the American worker, but we have created an entire ecosystem to ensure both the business and the employee have full support. DailyPay was recently recognized as the gold standard in the on-demand pay industry, providing full-service to the hundreds of companies we partner with and millions of employees nationwide. From first-class customer service to funding payments, to seamlessly integrating into all payroll and time management systems, we are the no-cost benefit employers love and the financial solution their employees depend on.

Through times of uncertainty comes great innovation. There is no question that the global pandemic has sped up digitization and spurred many companies from Kroger to Tractor Supply to offer their employees an on-demand pay experience. And the trend will only continue.

Within five years, it’s projected that 75% of working Americans will have the ability to access their money as they earn it through an on-demand pay benefit. Contactless technology will dominate every industry, including payroll. The future of pay has finally arrived and it’s easy to access — with just a simple click of a button.

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CHANGING PAY

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Jason Lee Jason Lee is a ntech entrepreneur and the Founder and CEO of DailyPay, the current market leader in the on-demand pay software sector. A nancial engineer by training, Mr. Lee spent nearly two decades on Wall Street creating numerous new products and markets to manage areas of risk.

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