DailyPay has added another bank — BMO Financial Group — to the list of clients that offer the fintech's earned wage access (EWA) product to their commercial customers, the companies announced Thursday.
BMO will cross-market DailyPay's EWA product through the bank's sales channels, with the option for BMO to white-label the service after the initial rollout.
Other EWA providers also work with banks; U.S. Bank offers EWA services to corporate customers via PayActiv. But DailyPay is one of the largest EWA providers also pursuing multiple bank relationships, said Rob Nardelli, DailyPay's director of commercial banking.
"EWA is driving a big portion of U.S. real-time payments volume, and DailyPay is at the forefront of that race," Nardelli said.
According to data from The Clearing House, EWA transactions are a popular use case for its RTP network. DailyPay transactions drove 5 million, or 8% of all 58 million U.S. RTP transactions during the quarter that ended June 30, 2023.
DailyPay targets companies with at least 400 employees for its EWA products, though Nardelli said the fintech is working on expanding its reach to smaller workforces in the future.
"We have a large base of commercial customers with right around 400 employees, and EWA appeals to them as a way to drive greater engagement and financial stability for their workers," said Andrew Harrison, head of U.S. banking and digital partnerships for BMO.
DailyPay currently doesn't offer EWA products in Canada, though Nardelli said the fintech is considering entering that market.
"Banks are showing a lot of interest in EWA because it's a way to extend a useful service to commercial clients without the bank having to deal with the complexity of the product or funding the wage-advances," Nardelli said.
The legal framework for EWA providers operating in multiple U.S. states is changing.
Many corporations offer EWA services to employees for free. But for those that enable EWA providers to charge a fee with every wage advance, some consumer advocates worry that EWA could become
Connecticut this month
By contrast, lawmakers in Nevada, Missouri and Arizona decreed that EWA advances are not loans, on the basis that EWA funds consist of money workers have already earned, with none of a typical loan's obligations such as repayment.
New York City-based DailyPay and other EWA providers have said they will follow each state's regulations to ensure compliance with local EWA rules on behalf of corporations using their services, including banks.
"We have more than 180 integrations with payroll systems and time and attendance systems, and when a bank plugs a commercial customer into DailyPay, they get instant access to a universe of payroll providers so they don't need to build anything," Nardelli said.
