London-based fintech Revolut has announced the launch of Payday, a new feature that lets users unlock a portion of their wages early. This is an alternative to credit card debt and short-term credit. When a business integrates with Revolut, its users can access the Payday feature directly from the app.
Currently, the Revolut Payday feature is limited to businesses based in the UK. The fintech intends to launch this feature to the businesses in the US and European Economic Area as well. However, Payday will not be available to all those who receive their salary in their Revolut account via direct deposit.
Revolut Payday feature
The fintech has to plug into the payroll system of the employer to know how much employees are earning. Also, it notes that employees need not change their payroll system. With this feature, employees can unlock a portion of their earned pay when they want. They can withdraw up to 50 per cent of what they earn in advance.
While businesses can use this feature for free, users will be charged a meagre, flat fee too use Payday. Also, does not act like debt and will not impact their credit score. Only a portion of their salary is withdrawn in advance and they will receive lesser money when they get their pay. Those who do not use the salary-advance feature can see how much they have earned so far in the month.
“We believe in the importance of making financial wellbeing accessible to all, and this includes focusing on the impact of financial stability on employees’ mental health,” Revolut co-founder and CEO Nik Storonsky said in a statement. “After the difficulties of the past year, the last thing employees need now is financial uncertainty and stress. It is important to move away from a situation where many are dependent on payday loans and expensive short-term credit, a reliance that is exacerbated by the monthly pay cycle.“