The payroll process needs to catch up to the rest of the payments world by becoming real time, according to Safwan Shah, the founder and CEO of Payactiv, an IPA member.
The company wants to help workers get money as they need it by providing access to wages they have earned sooner than a traditional two-week or monthly pay cycle would allow. The company does this by working with employers to track how much employees earn and offer the ability to get a percentage of those wages on as needed basis.
Workers can use PayActiv’s card to receive earned wages, have those wages deposited into an account, or even pay bills directly through PayActiv’s app.
In this episode we cover how the process works, and how earned wage access is different than other forms of early wage access.
The big banks are asking the Federal Reserve to re-examine what companies should be subject to interchange caps on debit transactions imposed by the Durbin Amendment to the Dodd Frank Wall Street Reform and Consumer Protection Act.
In a letter and meeting with the Fed, the Clearing House, a trade association and payments company owned by the biggest U.S. banks asked the Fed to examine whether certain business arrangements used by Fintechs mean that they should be subjects to the same interchange caps as banks with more than $10 billion in assets.
If the Fed were to apply the Clearing House’s recommendations, it could affect the business model for Fintechs and for many prepaid programs that are designed to help low-income Americans.
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