When it comes to financial services there’s a lot of new things coming to market, and with innovation like Open Banking only just getting started, the next few years look set to be particularly interesting. And while ‘get-paid-as-you-earn’ products and services are still a bit of a secret, it could be just the thing that makes the lives of millions a bit easier.
‘Get-paid-as-you-earn’ makes a lot of sense. But what does it all really mean in practice and which firms are making this happen? In this blog we talk a bit more about this emerging sector and highlight two firms leading the way, Wagestream and Hastee Pay.
Wagestream and Hastee Pay’s get-paid-as-you-earn products are a type of employee benefit that allow workers to access their pay, without waiting until the end of the month. It sounds rather simple, but for the millions of us that end up a little short in the run up to payday, it could in fact be revolutionary. If your company has signed up to using either of these services, you, as an employee will be able to access a portion of your earned wages (between 40-50%), meaning that reliance on expensive unplanned overdrafts, or other types of short term, high cost credit could be reduced.
Wagestream were the first get-paid-as-you-earn service to be authorised by the FCA, and they aim to give employees control over when they get paid and in doing so reduce the reliance on high cost loans. Through locking in to a company’s workforce management tools, Wagestream allow employees to access up to 40% of their pay as it is earned.
Like Wagestream, Hastee Pay (founded in 2017) also aim to offer employees more financial flexibility, by enabling employees to receive a portion of their earned pay immediately rather than waiting until payday. Hastee Pay allow workers to cash out as often as they want, and up to 50% of their pay as it is earned.
How much do these services cost employees?
Wagestream charge a flat fee of £1.75 however much an employee chooses to withdraw from their earnings. This is deducted from the employees paycheque alongside the money that was withdrawn.
The minimum withdrawal for Hastee Pay is £10 and their minimum fee is £1. For withdrawals over £22 Hastee Pay charge employees a 4.5% transaction fee. They will plan on releasing a monthly subscription option for more regular users, costing £9.99 a month.
Given that both firms are relatively new, and the sector is moving fast, the costs listed above may well change. We also understand that both firms have busy product roadmaps that will see them extend their current offerings over the coming year.
How much do these services cost employers?
Employers can sign-up to Hastee Pay for free, while Wagestream do charge employers a fee.
How easy is it to manage your account?
Both Wagestream and Hastee Pay provide iOS and Android apps, giving employees easy access to their platforms – but only if your employer signs-up. If these services sounds like they'll be of use to you, you can get in touch with your HR representative, to make them aware of these new services.
Trying to gave into a crystal board and look into the future is really hard. It's certainly true that both Wagestream and Hastee Pay are offering innovative services that are aimed at giving employees more flexibility re the pay they’ve earned, and this sounds like a good thing.
The key for both Wagestream and Hastee Pay is to convince employers that this is something they should offer their workforce as part of an employee benefit package. Both firms claim that offering employees their products could increase productivity, retention and motivation.
Almost two years ago, our founder Michael Fotis wrote an article for Spectator Money asking the simple question: if payday loans are evil why can’t we come up with anything better?
While it really is early days for the ‘get-paid-as-you-earn’ industry (and many more new names are set to jump into the industry) this could be a solution that helps consumers better manage their financial wellbeing.