Revolut Launches Salary Advance in the UK | Fintech News
Revolut Introduces "Payday" – Early Wage Access
Revolut, a leading fintech startup, is introducing a new functionality known as Payday. This feature is designed as an alternative to traditional credit options like credit cards and short-term loans.
Payday allows users to access a portion of their earned wages before their scheduled payday. Integration with a business is required for users to utilize this feature within the Revolut financial application.
Initial Availability and Expansion Plans
Currently, the Payday feature is limited to businesses operating within the United Kingdom. However, Revolut intends to extend its availability to the European Economic Area and the United States in the near future.
Access to Payday is not universally available to all Revolut account holders receiving direct deposits; employer participation is essential.
How Payday Works
For the feature to function, Revolut must integrate with an employer’s existing payroll system. This integration allows Revolut to track employee earnings in real-time.
Revolut assures employers that no changes to their current payroll systems are necessary to enable this functionality.
Once integrated, employees gain the ability to unlock a percentage of their accrued pay at any time. Users can access up to 50% of their earned wages in advance.
While the service is offered to businesses at no cost, Revolut will apply a nominal, fixed fee to individual users for each withdrawal.
Statements from Revolut Leadership
“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,” stated Nik Storonsky, co-founder and CEO of Revolut.
“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.”
Benefits and Use Cases
The Payday feature provides a potential solution for individuals who manage their finances on a paycheck-to-paycheck basis. It can be particularly useful for covering unexpected expenses.
For example, if an urgent car repair is needed before the end of the month, users can unlock funds immediately.
This is not a loan and does not impact credit scores; it represents an advance on already-earned wages, resulting in a reduced payout on the regular payday.
Additional Features and Adoption Potential
Beyond the salary-advance capability, Payday also provides users with a clear view of their earnings accumulated to date each month.
The success of Payday will likely depend on widespread adoption by businesses. Given Revolut’s substantial user base in the U.K., it is anticipated that businesses will become aware of the feature through their employees.
It remains to be seen how many companies will choose to integrate with the system.