Visa, PayActiv partner to deliver more workers’ wages the same day
Even as Uber drivers and other gig-economy workers gained the ability to be paid every couple of hours through debit push payments, other workers still had to wait for a batched paycheck.
Visa is now making those workers’ wages available with the same speed.
Through a partnership with San Jose, Calif.-based PayActiv, Visa is enabling workers at participating employers to receive wages they’ve earned instantly through the new PayActiv Visa Prepaid Card, the card network announced Thursday.
The service leverages Visa Direct, the debit push-payments service that a growing number of gig-economy companies are using for workforces with high turnover, at a time when millions of consumers are living paycheck to paycheck, according to Visa.
“The ability to offer more immediate and timely access to earned wages is a differentiator, particularly as we see more companies look for solutions that help to retain their workforce in the face of increasing competition from gig-economy workers,” said Cecilia Frew, Visa’s senior vice president in charge of Visa Direct global commercialization, in the release.
The move builds on PayActiv’s service launched in 2014 enabling employees at participating companies to request wages they’ve earned prior to their regular payday. The latest iteration with Visa Direct costs employers nothing, while employees pay a flat fee of $3 for a weekly pay period and $5 for a biweekly pay period.
According to PayActiv, its service helps steer consumers away from payday loans. Walmart began offering PayActiv’s service to its employees in 2017 and last year ADP added PayActiv as an option for companies using its payroll services.
PayActiv’s partnership with Visa marks the first time earned wages will be available in real time through a reloadable prepaid card, Visa said.
For employers looking for ways to retain workers, the new service could be a plus, said Safwan Shah, PayActiv’s CEO, in the release.
“Employers can get better retention, recruitment and engagement; and employees can get on a path of holistic financial wellness with timely access to their earned but unpaid wages,” Shah said in the release.
Faster delivery of workers’ pay depends on a few factors. Actual funds availability depends on the technology and location of financial institutions receiving the payments from PayActiv, according to Visa’s terms and services. Visa pushes speed by requiring banks in its fast-funds program to made funds available to the end user no later than 30 minutes after approving the transaction.
Central Bank of Kansas City issues the PayActiv Visa Card, Visa said in the release.