London-based fintech Revolut has announced the launch of Payday, a new feature that allows users to unlock part of their pay earlier. It is an alternative to credit card debt and short term credit. When a company integrates with Revolut, its users can access the Payday functionality directly from the app.
Currently, Revolut Payday functionality is limited to UK based businesses. FinTech also intends to launch this feature to companies in the United States and the European Economic Area. However, Payday will not be available to everyone who receives their salary in their Revolut account by direct deposit.
Revolut Payday feature
FinTech needs to log into the employer’s payroll system to find out how much employees are making. In addition, he notes that employees do not need to change their payroll system. With this feature, employees can unlock a portion of their earned salary whenever they want. They can withdraw up to 50 percent of what they earn up front.
While businesses can use this feature for free, users will be charged a measly flat rate for using Payday as well. Plus, doesn’t act like debt and won’t impact their credit score. Only part of their salary is withdrawn in advance and they will receive less money when they receive their salary. Those who do not use the payday advance feature can see how much they have earned so far in the month.
“We believe in the importance of making financial wellness accessible to everyone, and that includes focusing on the impact of financial stability on the mental health of employees,” said Revolut co-founder and CEO Nik Storonsky, in a statement. “After the hardships of last year, the last thing employees need now is financial uncertainty and stress. It’s important to move away from a situation where many rely on expensive short-term payday loans and credit, a dependency that is exacerbated by the monthly payroll cycle. ”