How on-demand pay is transforming employment and the economy

Here’s a universal truth: no matter the job or the salary…most people don’t want to wait until payday to get their earnings. From paying bills and navigating childcare costs to sending money to family overseas and funding emergency expenses—fast access to money matters. People across income brackets are increasingly living paycheck to paycheck and could use some help managing their cash flow—including those earning higher incomes, as 48% of Americans with annual incomes of over $100,000 live paycheck to paycheck.¹ Often it is just a matter of timing when funds come into bank accounts (pay) and when funds go out (bills, mortgage, and credit card payments).

In today’s globally connected, digital world, consumers have come to expect “instant” experiences in all facets of their lives, like communication, deliveries, rides, TV shows—and access to earned wages is no exception. To help stay competitive and build loyalty among employees, companies of all sizes are benefiting from Visa Direct’s digital global payment network to offer gig, hourly, or salaried workers fast, flexible payout options to eligible debit cards, bank accounts,² or wallets.³ By reducing barriers to worker-initiated payment solutions for more people, Visa Direct is striving to redefine financial inclusivity and help improve the digital economy.

The workforce is evolving

According to the Bureau of Labor Statistics, in 2022 nearly half of Americans were paid on a biweekly schedule.⁴ But this antiquated payment infrastructure is being challenged by a new generation of workers that are embracing on-demand work and, in turn, seeking on-demand access to their earnings. 76% of surveyed employees across all age groups, education, and income levels said it was imperative for their employer to offer earned wage access (EWA) programs.⁵

With the rise of the gig economy, combined with new ways of banking and the evolution and adoption of EWA programs, it is evident that the landscape of work is changing. The average consumer has eight financial accounts and conducts 15 transactions between them per year.⁶ Consumers want and expect the flexibility of real-time⁷ transfers between their financial accounts, whether it be for their retirement savings, their kids' education fund, their business, or their mortgage.⁸

On-demand payout options are much more than a perk. They can be life changing.

For example, ZayZoon helps employers offer early access to earned wages through a push-to-debit option enabled by Visa Direct—which is especially valuable for those struggling to make ends meet between paychecks. Workers can have funds transferred to their checking account through an eligible debit card that’s already in their wallet—in real-time.⁷ 86% of customers with access to multiple payout options prefer using push-to-debit.⁹

Americare, a privately owned senior living company, offers ZayZoon as a unique benefit to their staff. Not only does immediate and convenient access to wages alleviate day-to-day financial stress for workers, but it helps the company attract talent and stand out from the competition. Companies who offer earned wage access options have reported an increase in worker satisfaction while simultaneously improving their bottom lines thanks to, on average, a 50% reduction in turnover.¹⁰ About 25% of payroll professionals said that on-demand pay is a must-have solution for improving the employee experience.¹¹

Food delivery services are aiming to set themselves apart from their competitors when recruiting delivery partners by offering fast payout options. Grubhub turned to Visa Direct to enable Instant Cashout—giving their delivery partners access to their earnings 24 hours a day, seven days a week.  Visa Direct lets Grubhub send payouts to any debit cardholder delivery partner,¹² in real time.⁷ These real-time⁷ payouts have significantly impacted delivery partner engagement for Grubhub, resulting in less turnover and more hours of work.¹³

Through our collaboration with the innovative fintech DailyPay, Inc., global pizza company Sbarro transformed how they pay their U.S. workforce, financially empowering employees through earned wage access.

eTip’s digital tipping solution, enabled by Visa Direct, gives BWH Hotels® associates the choice to receive their tips in real time⁷ directly into their bank accounts. This also provides guests with an easy and efficient way to show their appreciation to hotel employees who may depend on tips for financial wellness. It’s app-less, cashless, and contactless, ensuring a secure and seamless experience for senders and receivers. In the pilot program, cashless digital tipping translated to more tips for employees. According to Nicolas Cassis, CEO of eTip, the average associate increased the size of their tip percentage by 60%, and their average number of tips increased by five times.

Visa Direct is helping shape a more inclusive financial future

The future of employment is one where workers can choose how, when, and where they want to get paid—regardless of the way they bank or if they even have a bank account at all. Visa Direct is helping make that future a reality—helping companies reach more employees through on-demand pay solutions designed for a range of endpoints, including traditional bank accounts, neobanks, prepaid cards, credit cards, and digital wallets.¹⁴ By enabling more options for employers to pay, we’re creating more opportunities for people to participate and succeed in the digital economy.

Whether you're an hourly employee or making a six-figure salary, Visa Direct is building an inclusive world of access to faster pay when you need it, for whatever you need it for. A delivery driver can use their day’s earnings at the end of a shift. Small businesses can quickly pay contractors around the world in the currency they use. And an online marketplace seller can cash out once they make a sale.¹⁵ These simple benefits can have a significant impact on workers’ financial wellness as the stress of having bills to pay and no funds in hand can be alleviated by on-demand-pay.

At Visa, our mission is to be the best way to pay and be paid for everyone everywhere—and to uplift everyone everywhere. Our network, made up of innovative solutions is designed to enhance payment flows to help more people thrive in the modern economy.

1. 48 Percent of Americans with Annual Incomes over $100,000 Live Paycheck to Paycheck, 9 percentage points higher than first reported in June 2021.
   https://www.prnewswire.com/news-releases/48-percent-of-americans-with-annual-incomes-over-100-000-live-paycheck-to-paycheck-9-percentage-points-higher-than-first-reported-in-june-2021--301494770.html
2. Use cases are for illustrative purposes only. Program providers are responsible for their programs and compliance with any applicable laws and regulations.
3. Push to Wallet capability is under development and not yet commercially available.
4. U.S. Bureau of Labor Statistics, Length of pay periods in the Current Employment Statistics survey, October 13, 2022.
   https://www.bls.gov/ces/publications/length-pay-period.htm#:~:text=In%20February%202022%2C%20biweekly%20was%20the%20most%20common,Semimonthly%20and%20monthly%20pay%20frequencies%20were%20less%20common.
5. ADP, Inc., Earned Wage Access: Tapping into the Potential of Flexible Pay for Today’s World of Work, January 2022. https://www.adp.com/-/media/adp/resourcehub/pdf/adp_ewa_study_whitepaper.pdf
6. Aite Group and Visa Inc. Banking and Brokerage Consumer Study (1,957 U.S. consumers), April 2019 – March 2020.
7. Actual fund availability depends on receiving financial institution and region.
8. Aite Group and Visa Inc., Banking and Brokerage Consumer Study (1,957 U.S. consumers), April 2019 – March 2020.
9. Based on employees who had access to multiple payout options including push-to-debit. ZayZoon internal usage analysis of 2,000 users, January 1 – July 1, 2019.
10. Dailypay, “Earned Wage Access 2022: Impact on Retention and Hiring,” July 10, 2022.
    https://www.dailypay.com/resource-center/blog/what-is-earned-wage-access/
11. Dailypay, “Earned Wage Access 2022: Impact on Retention and Hiring,” July 10, 2022.
    https://www.dailypay.com/resource-center/blog/what-is-earned-wage-access/
12. Use of instant cashout feature available to delivery partners with a valid bank account, Visa debit card, or Mastercard debit card.
13. Data collected by Grubhub from June-August 2022 for over 200K delivery partners in the United States.
14. Push to Wallet capability is under development and not yet commercially available.
15. Actual timing of fund availability varies by market. Please refer to your Visa Representative for further information.