As the financial services industry moves towards faster payments, some entrepreneurs are looking for ways to narrow the gap between doing the work and getting a paycheck – potentially providing a solution to the problem of late bill payment fees, overdraft fees and payday loans.
These emerging technologies are a response to the fact that traditional, bi-weekly payments seem out of date in the mobile era, especially for workers who experience volatile income streams such as Uber drivers, freelancers and even some hourly employees.
According to Ryan Falvey of Financial Solutions Lab, more than half of American adults are struggling financially, and the ability to transfer money more quickly to bank accounts could help stabilize the financial situation of many Americans.
The transport company Uber, for example, has reportedly been working with banks to give its drivers daily access to their pay, if requested. Lyft, another transportation service, announced same- or next-day payments for their drivers (though drivers would have to pay a fee).
Of course, those virtually instant payments require new technology. Any sort of accounts payable process that relies on manual data entry is not going to work. But as technology advances and accounts payable solutions become more automated, the days of waiting for a paycheck may become a thing of the past.