Stearns Bank in Saint Cloud, Minnesota, is working with the on-demand payment technology firm Reset to launch an earned-wage card for blue collar and immigrant families struggling with access to money.
Alongside
Almost two years since incorporating, the firm officially launched its Reset card in February. The card, issued by the $3.1 billion-asset Stearns Bank and supported by Visa's network, uses payroll and bank account data to establish a dynamic spending limit based on earned wages. Reconciliation, compliance oversight and other components of the program are handled by the bank.
Kelly Skalicky, president and chief executive of Stearns Bank, said consumers are increasingly seeking options that allow faster access to their money, and this trend is showing no signs of slowing down.
"They want to be more in charge and have more authority over their income and with these services, and especially how Reset is doing it … I think it really empowers [consumers] financially," Skalicky said.
Cardholders create an account on Reset's financial companion app, which records spending data and other expenses accrued through the card. They link their existing bank or credit union accounts through an integration with Plaid to provide Reset with account balance and recurring expense data. A separate integration with
After confirming the eligibility of the linked accounts, Reset will then go through a series of identity and know-your-customer checks supported through another integration with the San Francisco-based API platform provider Synctera, which also handles recording card transactions on Stearns' ledgers.
Currently, Reset is processing card applications on a rolling basis and is open to the public. Reset does not charge consumers interest, late or monthly fees, instead collecting revenue through interchange fees paid by merchants or retailers.
His own financial struggles and career experience inspired Reset's CEO to launch the company.
"I knew that I wanted to go to college, but watching my dad work up to four jobs at once growing up [made me realize] that it was going to be on me to fund myself," said Matt Dicou, co-founder and CEO of Reset. He ran a small business to pay for his undergraduate degree and moonlighted as a handyman while leading Visa's EWA vertical in the U.S.
Unlike some cash advance or early wage access models that use historical bank data to support underwriting decisions based on past deposit activity, Reset's version of earned wage access uses information gleaned directly from payroll providers to provide real-time insights into how much a consumer earns, Dicou said.
"We're very much in the camp of building financial products that actually work for the working class and actually are tailored to how they manage money and to their lived reality," Dicou said.
Reset is a recent entry into a market that
Clair, a New York-based EWA fintech founded in 2019, works with the $7.9 billion-asset Pathward Bank in Sioux Falls, South Dakota, to provide users with cost-free instant wage advances. Consumers can access the funds, which are sent as loans through the bank to accommodate regulatory frameworks, using a digital checking account and debit card provided by the fintech when they sign up.
PNC Financial Services Group, parent company of the $558 billion-asset PNC Bank in Wilmington, Delaware,
Advocates for EWA fintechs say that leaders are eager to collaborate further with traditional financial institutions, but hold back due to the lack of a regulatory framework built specifically for this class of product.
"The industry of earned wage access companies that the American Fintech Council represents are asking regulators and state legislators to regulate the industry. … They're looking for a regulatory structure that fits the emerging products and recognizes that [EWA] is creating access to financial options for consumers who do not want loans," said Phil Goldfeder, CEO of the American Fintech Council.
Richard Crone, founder and CEO of Crone Consulting, said EWA is akin to "payroll advance" account features and has grown in popularity among financial institutions "as another way of gaining 'direct deposits' for accounts, the single greatest contributor to account loyalty, active use and relationship expansion," Crone said.
Executives of both Reset and Stearns Bank will continue to explore the use cases and reach of the card as the campaign continues to expand.
"When we sponsor a fintech, we also try to find ones that not only do we believe in, but also find ones where we can be a customer of theirs. … So we can sponsor their activity, but we can also offer their technology and their solution or product and service to our own customer base as well," said Josh Hofer, chief risk & information security officer for Stearns Bank.
