Walmart’s early payday app partnership shows growth

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NEW ORLEANS – More than 250,000 Walmart employees – just under 20% of its workforce – use its prepayment partnership with the financial app Even, the retailer told the Benefits Forum & Expo this week.

This is a growth of 212% in participation from March, while 80,000 employees were enrolled in the program.

Walmart added the benefit in December, allowing 1.4 million of its employees to receive a salary before their next salary. Instead of waiting two weeks between paychecks, Walmart employees can use Even to access a portion of the pay for the hours they’ve already worked. Financial technology company PayActiv is also working with Walmart on the service, which aims to help workers avoid expensive payday loans and avoid late fees.

“We have experienced amazing growth beyond our expectations,” said Scott Pullen, senior manager of benefits at Walmart, at the conference, hosted by Employee Benefits News and Benefits Advisor.

“A few years ago, we saw that 76% of Americans live paycheck to paycheck. It just shocked us, and it continues today. And that extends to all payrolls: it doesn’t matter if you make $ 20,000 or $ 200,000 a year, ”Pullen said. Walmart covers the full cost of Even’s automated financial management tool for hourly associates and employees. Employees can access wages early, through a feature called Instapay, up to eight times a year for free. After that, employees pay $ 3 per pay period to access Even Plus, a premium version of the app that offers additional financial services; the $ 3 also covers transaction fees.

“One of the biggest problems for employees [with money] is the timing, when income and expenses don’t always add up, ”Pullen said. “You get paid every two weeks, but your bills are paid every month. And because sometimes these times are staggered, even a day or two, it can result in late fees. “

When Walmart started talking about financial aid to its employees, they weren’t sure workers would want to discuss these private matters. “But we heard that they wanted our help. They were looking for help managing their money, ”he said, adding that during his conversations with employees it became clear that they were spending too much and not putting enough money into the business. ‘saving.

Even, which logs into workers’ bank accounts, aims to solve this problem by allowing employees to meet their savings goals and create a budget showing exactly how much they can safely spend before their next paycheck.

Nonetheless, Pullen acknowledged that there may be flaws in implementing a program like theirs, citing a recent opinion piece on EBN which has dug some of the risks of paid on-demand apps, including hidden charges.

See also: Beware of the hidden threat in paid on-demand apps

“We are not naive,” Pullen said. “We know there are negatives associated with this.”

To avoid potential pitfalls, he said the company had set up a number of “guide rails” around the product “to ensure [getting advance pay] has not become a habit.

“We want to make sure it is used in moderation,” he said. “[So employees] can only access salary earlier than once per pay period. [They] can only access 50% of the take home pay they earned, so they can never have a zero dollar paycheck at the end of the cycle.

Jon Schlossberg, CEO and co-founder of Even, said that while there is no quick fix for employee financial problems, the app helps people gain more control over their situation.

“It’s not a loan,” he says. “It’s an advance; you have already earned that money. There is no charge, there is no interest.

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