DailyPay Raises $260M to Help Workers Get Paid Faster
DailyPay has raised $260 million to build on its on-demand payroll offering.
The company announced the new funding in a Tuesday (Jan. 24) news release, saying it would help it fuel its domestic growth and international expansion and invest in product innovation. It follows a $300 million revolving credit facility from Barclays in March of 2022.
“On-demand pay has proven to be a transformational financial wellness benefit for employers and their employees, and DailyPay is the proven market leader,” said Kevin Coop, DailyPay’s CEO. “Now, our opportunity lies in capturing more of the market, which is overwhelmingly vast green space.”
As PYMNTS noted in November, paychecks that aren’t deposited electronically have become increasingly rare. And studies suggest that those bi-weekly direct deposits “could soon be the pokey exception to the faster and emerging new norm.”
The November edition of PYMNTS’ “Money Mobility Tracker: The Rise Of Digital And Early Access Compensation,” shows the demand for on-demand payday on the rise.
Almost 70% of workers said they would be more likely to stay with an employer that offered instant disbursements for free. The study also found that this number drops in half when the speed goes away or as the cost goes up.
“While this practice has been the norm for Uber drivers for years, the study found that the instant payday feature is coming to more companies and countries than ever, especially in lower-wage, tighter household budget situations, or with staff who earn tips,” PYMNTS wrote. “Faster payday has a huge fanbase.”
Earlier this week, PYMNTS noted that instant payments — in the form of tipping — offer a retention solution as the hospitality and dining industries deal with worker shortages.
In an interview with PYMNTS, Brian Hassan, co-CEO of instant cashless tip payouts platform Kickfin, said a lot of press is focused on navigating the digital tipping culture that became especially popular in the aftermath of the pandemic.
“You really can’t get a cup of coffee anymore, anywhere without being asked to tip a few bucks,” Hassan said. “…From our perspective, this is giving the ability for the customer to show gratitude to the hospitality employee.”
Hassan said estimates suggest eateries and coffee shops are spending as much as $5,500 per worker to retain their staff.
“So, if there’s any way that they can reduce what is a multi-hundred percent turnover year over year on labor by saying instead of paying you $15 an hour, perhaps you could take home $20,” then that’s just smart business, he said.