Episode•February 3, 2022•29 min

On Demand Pay with Matt Kopko | Ep. 87

Matt Kopko, DailyPay's Vice President of Public Policy, joins Tiffany to talk about how DailyPay works and leading companies are now choosing to use this service. About Our Guest Matt Kopko is DailyPay's Vice President of Public Policy, where he manages DailyPay's interactions with regulators, legislators, other government officials and stakeholders. Prior to his role at DailyPay, Matt served in a similar role at Bird, the micromobility company. Matt was also a senior government official and member of the Senior Executive Service, as well as an attorney in private practice. Matt holds a bachelor's degree from Princeton University, and a JD/MBA from the University of Chicago. Connect with Matt Twitter: https://twitter.com/dailypay LinkedIn: https://www.linkedin.com/in/mattkopko/ Connect with Tiffany on Social Media Facebook: Money Talk With Tiff Twitter: @moneytalkwitht Instagram: @moneytalkwitht LinkedIn: Tiffany Grant This podcast uses the following third-party services for analysis: Podcorn - https://podcorn.com/privacy OP3 - https://op3.dev/privacy

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Key Takeaways

1
DailyPay provides earned wage access as an employer benefit, not a loan
Employees access only wages already earned, verified through employer time/attendance and payroll data
Uses a 'dynamic income algorithm' to calculate net take-home pay after taxes, deductions, and garnishments
Eliminates the need for predatory payday loans or costly overdraft fees
2
Users save an average of $1,205 annually in fees and interest
Payday loan users can save up to $900 per year
Overdraft-reliant users can save up to $600 per year
Research conducted by former CFPB employees showed nearly half of users previously relied on payday loans or overdrafts
3
DailyPay improves financial visibility and budgeting behavior
Users can track earnings hourly or daily through the app
About 50% of users don't withdraw funds but use the app purely for earnings visibility
Users report becoming more responsible budgeters by a 20:1 margin
4
Savings tools are built directly into the platform
Auto-save feature enables automatic split direct deposits to any savings account
DirectSave allows free transfers to savings between pay periods
Roundup Save rounds up transactions to the nearest $20 and directs the difference to savings
5
DailyPay is disrupting traditional bi-weekly payroll cycles
The service is described as 'the ATM for your paycheck'
Growing adoption among major employers including Kroger, DaVita, and Tractor Supply
Positioned as a competitive advantage for employers struggling to attract and retain workers

Intro

Matt Kopko, VP of Public Policy at DailyPay, joins Tiffany to explain how earned wage access technology works and why major employers are adopting it as an employee benefit.
Matt Kopko is DailyPay's Vice President of Public Policy. Previously, he held a similar role at Bird (micromobility), served as a senior government official in the Senior Executive Service, and worked as an attorney in private practice. He holds a bachelor's degree from Princeton and a JD/MBA from the University of Chicago.

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– What is DailyPay?

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 Kopko

– The Shift Away from Bi-Weekly Pay

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.
– Matt Kopko

– The Dangers of Payday Lending

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.
– Matt Kopko

– How DailyPay Works: Employer Integration

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.
– Matt Kopko

– Taxes, Deductions, and Net Pay

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.

– Research Findings on Savings

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.
– Matt Kopko

– Built-in Savings Tools

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.
– Matt Kopko

– Employer Adoption and Competitive Advantage

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.

Resources

DailyPay Official Websitetool
DailyPay Research Portalarticle

Topics

Earned Wage AccessPayday LendingFinancial TechnologyEmployee BenefitsPayroll InnovationOverdraft FeesWorkforce RetentionPersonal FinanceHR TechnologyFinancial Wellness