Out of all the many concerns that Americans now have related to COVID-19, more and more are worrying about getting paid, and quickly.
DailyPay, which allows workers to take out pay they’ve already earned whenever they need it instead of waiting weeks for their next payday, saw a 400% jump in use between March 14 and March 17 as workers rushed to access their money early to stock up on food, cleaning supplies, wipes and other products before shelter-in-place rules took effect. The company, which typically charges a $2.99 fee for employees to get access to their pay immediately, or $1.99 for the next business day, has waived all fees amid the crisis.
DailyPay is one of many pay providers that are shifting to more flexible, personalized pay arrangements. While direct deposit is still the dominant form of payment, with 80% of employers and employees in North America saying they prefer it, nontraditional payment methods have been making inroads. According to research by ADP, nearly half of employees in North America are willing to accept nontraditional payment methods, such as mobile payments, digital platforms or pay cards.
Companies such as ADP, Fiserv, Green Dot and others are rolling out pay cards and virtual bank accounts. There’s also Zelle, debit accounts linked to Venmo or PayPal, and many other competitors. Bank accounts are no longer required for some of these alternative pay arrangements.
Venmo and PayPal, for instance, allow users to keep money in the app and then pay for things, also through the app. Funds can also be transferred to a bank account. Pay cards act like prepaid cards or debit cards, which can be loaded electronically each time an employee gets paid. Employees can then use the pay card like a debit card, at an ATM or to make online purchases.