Why PNC Connected to an Early Access Salary Marketplace | PaymentsSource


PNC Financial Services Group strives to help corporate clients retain employees by supporting a number of payment technologies that can free up worker cash flow.

PNC supports both Early Wage Access (EWA) – a system for giving employees the portion of their salary they have already earned before the traditional payday – and Request for Payment (RfP) , a billing method linked to real-time payments. The two technologies are not directly related, but they can intersect in useful ways, for example when a biller needs funds immediately and his customer can make this payment by receiving part of his salary several days before the predicted date.

“In a tight labor market, employers will look to create more connectivity with their employees,” said Chris Ward, executive vice president and head of digital and innovation for the cash management unit of PNC in Matthews, North Carolina. “Employees are going to want immediacy and an interconnected experience for pay and how they can manage and spend funds.”

PNC works with New York-based DailyPay for EWA and The Clearing House’s RTP rail for RfP. Through these partnerships, PNC is able to combine EWA and HR services with its RfP support to help consumers manage their payroll and billing; while DailyPay can try to differentiate itself among EWA providers.

PNC recently used DailyPay’s marketplace to launch PNC EarnedIt, an on-demand payroll product for business users. The product uses companies’ existing payroll and time tracking systems to calculate net earnings, allowing employees to access available balances at any time and choose the rate at which they wish to receive the first part of their salary. Up to 80% of an employee’s salary can be made available before the traditional pay period.

ANC is one of about half a dozen banks that offer tenders through the real-time payment rail. RfP is presented as a way to help consumers avoid overdrafts and client companies manage supply chain challenges. Combined, RfP and EWA can help users manage their funds by taking part of their salary when a bill needs to be paid in real time, for example.

The partnership is based on an early agreement between PNC and Daily Pay to expedite disbursements of advance salaries between the bank’s cash management clients and their employees.

“In a battle for consumer deposits, banks are going to have to get creative to get funds to people sooner,” said Jason Lee, Founder and CEO of DailyPay.

Friday’s jobs report showed employment approaching pre-pandemic levels, but also revealed a near-historic level of job vacancies, with 11 million vacancies, or 1.7 vacancies for every available worker. Addressing these issues through payment technology is more up to banks or financial institutions, according to Lee.

“Associating EWA with Instant Billing is a way to communicate to consumers that they can use the bank for all kinds of financial services,” Lee said, adding that DailyPay plans to announce other banking partners in the coming weeks. .

The labor shortage has drawn a lot of reactions from fintechs and other companies. Lendersfor example, offer credit as a means of increasing wages or bonuses to attract or retain workers. EWA Suppliers partner with HR outsourcing companies or employment firms to use flexible pay as a lure that employers can use to attract staff.

DailyPay operates in a crowded market for EWA businesses, including companies like Clair, Cloudpay Now, Wagestream, Square Payroll, ActivePay, and Earnin. There is pressure to expand into new areas such as human resources or management tasks such as shift scheduling, especially as EWA vendors begin to partner with traditional financial establishments at add breadth to their main payroll products. Wage controls have also become a key benefit for employers beyond traditional targets such as gig workers and freelancers.

“Employees see on-demand access to wages as a benefit, and employers are looking for scalable ways to attract and retain their workforce, especially hourly and frontline workers,” Betsy said. Summers, senior future of work analyst for Forrester Research in Los Angeles. Angels.

“Whether they consider this reason or not, employers are reducing financial stress by offering this benefit, helping employees avoid overdraft fees, predatory lenders and other stopgap measures to get money on the pay cycle,” Summers said, adding that there is some risk for EWA as early access fees could include fees that increase consumer spending. PNC will determine the fee structure for enterprise EWA deployments through DailyPay Marketplace. Daily Pay does not charge fees for direct card deposits from DailyPay and has variable fees for other accesses that are capped at $5 per pay period.

“What I like to see is EWA coupled with a budgeting tool and educational resources, in the app, to help people manage their money and financial well-being,” Summers said.


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