Digital bank Revolut launches a new feature called Payday to let some customers access 50% of their salary a day earlier.
Revolut stated that use of the platform will come with a “small, flat fee”.
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For about £1.50, eligible users will be able to access part of their earned salary.
This new feature does not have to concern the employers, as it does not cost them anything.
However, so far it is only available to customers across the UK, with the EEA and US will be following shortly after.
Revolut also stated that cash flow will not be affected by the move to the platform “as employers will continue to pay employees salaries at the end of each month”.
Nik Storonsky, founder and CEO at Revolut, said: “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 difficulties of the past year, 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.“
James Andrews, senior personal finance editor at Money.co.uk, said: “Someone budgeting responsibly who already has a savings buffer to cover unexpected bills will see very little benefit from this, which means it’s only helpful to people who are already close to the edge financially.”
“The danger is that people with poor planning will use it at the wrong time, or see it as an excuse not to have to budget or think things through – meaning when bills do come in their debts will rise immediately and they will be charged more overall as they are paying interest for longer.”
After Softbank lead an $800 million investment into Revolut, the companys’ valuation climbed to $33 billion.
