Digital Transactions Authoritative, insightful and timely information for payments professionals
DailyPay Inc., a provider of technology for the fast-growing earned-wage access market, said early Thursday it will add a savings feature to its new DailyPay Visa prepaid card. The goal is to let users put aside earnings as they receive them, the New York City-based company says.
The company says it facilitates access to money stored on the card at no fee to the user with participation in the program by the user’s employer. Fees are also waived for transfers through direct deposit to the card through DailyPay, the company adds. DailyPay in 2021 reached an agreement with The Clearing House Payments Co. to facilitate real-time transfers.
DailyPay says the object of the new card, issued by The Bancorp Bank, is to encourage savings, particularly among persons who are unbanked or underbanked. The company cites statistics indicating 65% of U.S. citizens have minimal or no savings and meeting their needs as paychecks arrive. Users who leave their employment can take the card with them, with access to its banking features, DailyPay says.
“Establishing a savings habit is a key step in progressing from financial crisis to stability and beyond,” said Jack Rubin, a senior vice president for consumer financial solutions at DailyPay, in a statement. Responding by email to queries from Digital Transactions News, Rubin said DailyPay’s products “are all built intentionally for the millions of daily workers to help them break the paycheck to paycheck cycle.” He added that “merchant-funded” cash-back offers will be added to card in November.
DailyPay, which was founded in 2015, says its statistics indicate 69% of its users who paid late fees before using DailyPay stop paying these charges or do so less frequently when they start using the company’s products.
A report issued this summer by the Consumer Financial Protection Bureau indicates EWA began to take off in the wake of the pandemic, with the volume of transactions processed by providers growing 90% from 2021 to 2022. More than 7 million U.S. employees used the service in 2022, according to the report.
