By Jeanniey Mullen
Payroll professionals are calling the daily pay benefit the biggest disruptor to the payroll industry since direct deposit 50 years ago, and we absolutely agree.
There was a time when the daily pay benefit was a foreign concept, even among HR professionals. The DailyPay team would attend conferences and be met with blank stares when sharing about the services we provide. We’d hear all kinds of dissenting arguments about how this benefit would solve nothing, or even that it would further enable the supposed financial irresponsibility of our users. However, as time has gone on and the positive effects of this benefit have been proven across many income levels and industries, the power of daily pay is becoming much more widely recognized. With the right provider, this mutually beneficial offering comes at no cost to the employer, but it has countless positive results for companies and their employees.
Here are my predictions for how the daily pay industry will continue to evolve in 2020 and beyond.
Partnering with even more best-in-class employers
In 2020, we foresee that companies will continue to adopt the daily pay benefit as a solution to decrease turnover rates, increase employee engagement and circumvent wage stagnation. Fortune 500 companies and other household names will continue to make DailyPay a part of their benefits package, with companies such as Mall of America and Six Flags coming on board in 2019. As the early adoption phase is coming to a natural close, providing a daily pay benefit will become a must-have in order to stay competitive, especially in the quick-service restaurant, home healthcare and retail industries. Best-in-class companies operate best in class, and the executive leaders of these organizations know they need to innovate in order to stay competitive in today’s labor market. By leveraging a cutting-edge benefit like daily pay, they can support financial wellness for their employees without spending a penny.
Not only do we foresee many more employers implementing a daily pay benefit, but we also see more employees enrolling in this benefit. In 2020, DailyPay is aiming to achieve 40% employee adoption within each of our partner companies. We believe that positive word of mouth from coworkers, increased consumer trust in this benefit the longer it is on the market, and a commitment to innovation to stay ahead of our industry competitors will help us achieve this goal. The daily pay benefit was created to better the financial wellness of hard-working Americans, and we aim to help as many employees as possible.
Continuing to receive support and protection from regulators
The role of regulators is and always has been to protect consumers from predatory practices. These regulators are smart, savvy and innovation-friendly. We predict that in 2020, they will continue to uphold existing regulations to separate the predatory payday lending industry from the daily pay industry. They will not allow consumers to fall prey to neo-payday lenders attempting to position themselves as daily pay benefit providers. While daily pay benefit providers enable employees to access their earned wages before payday, these neo-payday lenders require monthly subscription fees, inactivity fees, “tipping” for the service, and other predatory practices that take advantage of the financially disadvantaged.
Regulators will also continue to ensure that daily pay benefit providers structure their technology in a way that protects child support payments and other wage garnishments, as DailyPay does.
Providing premier service to employers and employees
As additional daily pay benefit solutions become available, employers will place more emphasis on the quality of service rendered when choosing a provider. This will motivate daily pay benefit providers to increase the quality of their services, both to the employers and to their employees, as new precedents are set for implementation speed and efficiency, post-implementation support, customer service and co-branding opportunities.
Payroll companies will continue to announce their plans to participate in on-demand wage access, which illustrates how broad the market interest is for this benefit. As the market becomes increasingly saturated with providers, payroll teams will be able to push back on the implementation of any systems that require extra labor on their part, heightening the competition for premier service and raising product standards.
Moving forward with a clear vision
It is inevitable that the daily pay benefit will continue to grow in 2020. Rapid adoption of this new technology will be fueled by employer competition and employee demand. Payroll professionals are calling the daily pay benefit the biggest disruptor to the payroll industry since direct deposit 50 years ago, and we absolutely agree. While DailyPay’s original mission was to help employees living paycheck to paycheck have more financial security, that mission is evolving to change the quality of the pay experience for every single working American. As technology continues to make everything instantly available to consumers, it should come as no surprise that something as integral as pay should continue to evolve with the times.
Jeanniey Mullen
Chief Innovation and Marketing Officer
DailyPay, Inc.