UK-based fintech firm Revolut has launched a new product offering early salary access to employees in partnership with employers.
According to Revolut, the product dubbed Payday allows employees to draw down 50% of their salary as they earn and instantly transfer the funds into their accounts.
The feature that serves as an alternative to credit cards and short-term credit is limited to the UK market. However, the company is planning to expand to the rest of Europe and the United States.
Notably, not all users will access the Payday feature because businesses need to integrate with Revolut first.
Additionally, Payday is not classified as a loan; therefore, beneficiaries’ credit scores will not be impacted. Revolut notes that it intends to help employees control and be flexible in their finances and avoid accruing debt between paychecks.
Furthermore, employers will access Payday at zero cost with the ability to be integrated into their payroll. The challenger bank also clarified that Payday would not impact the platform’s cash flow provided that employers continue remitting salaries.
“We believe in the importance of making financial wellbeing accessible to all, and this includes focusing on the impact of financial stability on employees’ mental health. after the past year’s difficulties, the last thing employees need now is financial uncertainty and stress. It is important to move away from a situation where many are dependent on payday loans and expensive short-term credit, a reliance that is exacerbated by the monthly pay cycle,” said Revolut founder and CEO Nik Storonsky.
It is worth noting that the tool is separate from the “Early Salary” feature that Revolut launched in December 2020.
Revolut’s product expansion plan
The features are part of Revolut’s goal to become a super app. Since launching, Revolut has integrated other services like buying and selling cryptocurrencies.
Currently, the app serves over 16 million customers worldwide, with Revolut Business users accounting for at least 500,000 users.
The platform is currently on an expansion plan, with the U.S. and India being its latest major markets.