On Demand Pay with Matt Kopko | Ep. 87

• DailyPay is an earned wage access benefit offered through employers. It functions as an 'ATM for your paycheck' allowing employees to access wages they've already earned without taking loans or relying on payday lenders.

Why are we loaning our employers our wages for two to four weeks at a time, as opposed to having the right to have our own property as we earn it?

• Matt argues that the traditional bi-weekly payroll cycle is an artifact of the early 1900s tax system. With instant payments becoming the norm in the gig economy, employees now expect more flexible access to their earnings.

The tube is kind of out of the toothpaste at this point. Once people start having the experience of being paid flexibly like this... people are like, wow, like it's like a wake up moment for you.

• The average payday loan of $375 gets rolled over about eight times, resulting in $502 of interest and fees. DailyPay positions itself as the market-based solution to this cycle.

We're kind of taking a zero off of the payday lending industry and giving people a fantastic option.

• DailyPay integrates directly with employer time and attendance systems and payroll platforms. Employees continue using their normal time clocks; DailyPay pulls that data to calculate available balances.

We don't want to disrupt any of those systems because that's going to be friction to getting this system implemented.

• DailyPay uses a patented 'dynamic income algorithm' to calculate net take-home pay after taxes, 401k contributions, health benefits, and garnishments. This ensures employees only access money they would actually receive on payday.

• A study conducted by former CFPB employees found that DailyPay users previously relied on payday loans at four times the national average. Nearly 40% had used overdraft fees, with one in five doing so monthly or more.

If you're paying $100 a month to your bank for overdraft, you can replace that with two, four or $6 a daily pay.

• DailyPay offers three savings features: Auto-save for automatic split direct deposits, DirectSave for free transfers to savings accounts, and Roundup Save which rounds up transactions to the nearest $20 for savings.

That's again, that holy grail of savings policy.

• DailyPay serves millions of workers across major employers including Kroger, DaVita, and Tractor Supply, as well as small businesses with as few as seven employees. It's positioned as a tool to attract and retain workers in a tight labor market.