Visa teams up with PayActiv to bring earlier pay to workers
Cashless transaction giant Visa is teaming up with financial services firm PayActiv to bring workers real-time access to earned wages. In other words, where workers had to previously wait until payday to access the money they’d earned, they’ll now have the ability to access that money ahead of normally scheduled pay days. Well, provided companies sign up, and users are willing to pay a small fee to access their cash.
Visa’s share price has increased by 15% since the start of 2019
Source: Yahoo Finance
PayActiv says that the program has been in operation for the last two years, and that there are currently 200 employers signed up, who employ more than 2 million eligible people between them. Most of those employees work for Walmart, the US’s largest private employer (with 1.4 million staff), which signed up at the end of last year.
The concept is simple: employees can use a smartphone app to download any money they’ve already earned, but not yet been paid, onto a Visa debit or preloaded card. To do so costs workers on a weekly pay cycle $3, and on a bi-weekly pay cycle, $5. People only pay once per pay cycle, no matter how many times they use the service.
The service has the potential to dramatically ease the lives of the most financially vulnerable – including those employees who may not have access to a traditional checking account, those who are penalised with late payment charges, and those who may have had to use expensive payday lenders in the past.
PayActiv founder and CEO Safwan Shah said: “A lot of people get hit by a $35 charge when all they might need is $10. But they need that $10 at the right time.” Cecilia Frew, a senior vice president at Visa, added that the company was “proud be partnering with PayActiv to offer additional choice and flexibility to employers and employees when managing their financial well-being.”
Dominion holds Visa in its Global Trends Ecommerce Fund.
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