Comdata adds instant earned wage access option for payroll card

Comdata has launched Fintwist OnDemand to provide instant earned wage access services to working adults amid an increasingly crowded market for faster payroll payments.

The OnDemand payment feature is being added to Comdata’s existing Fintwist payroll card solution that currently provides digital access to wages. The real-time payment service allows an employee to access up to 50% of their earned, but not yet paid wages at any time during a payroll period. The wages are made instantly available.

“It’s a natural extension of the core business that we’ve been in with paycards,” said Brian Radin, president of Comdata Prepaid, a FleetCor subsidiary. “We’ve been in paycards for decades, then launched Fintwist about 18 months ago and now are enabling instant wage access to hundreds of thousands of employees across America.”

The Fintwist mobile and online application is provided to Comdata’s payroll card customers who are able to receive their paychecks electronically. The funds can be spent using the Fintwist debit Mastercard issued by Regions Banks. Users can also use the mobile app to pay bills, send P2P payments and track spending.

Workers can enroll for the OnDemand payment feature for free and will pay an administrative fee for each pay period in which they use it. Comdata is currently testing a few different price points across weekly, bi-weekly and semi-monthly payroll cycles to better understand employee demand and value.

Radin noted that the CFPB is actively looking at the EWA market and has expressed concerns regarding transaction fees charged for each time an EWA service is used. The general sentiment is that charging a customer one small fee during a pay period and allowing unlimited uses within that pay period is much more user friendly and also caps fees paid.

With so many adults struggling financially as a result of the pandemic, supply and demand for EWA services have grown.

In a PaymentsSource Future of Money Study from November 2020, already 14% of U.S. adults reported having used EWA services with an additional 46% having expressed an interest in using them. The study found that the highest level of adoption was among millennials at 26% followed by Gen Z at 22% and the lowest adoption level was among boomers at 1%.

In 2020 a number of companies launched new or expanded existing offerings as well as raised funds in the EWA market such as Ceridian, AnyDay and Even. These companies compete in a market with other veteran fintechs that includes PayActiv, DailyPay, Branch, FlexWage, Immediate and Earnin.

“This solution is an important tool for employers to be able to attract and retain employees,” added Radin. "It’s also a great solution for the employees to be able to leverage since it gives them more control about how they get paid and when they get paid, alleviating the financial stresses that existed even before the pandemic and now only have gotten worse. The top uses people have for earned wage access is to buy food, pay for gas, purchase clothing and make rent payments. These are everyday expenses that people struggle to afford.”

In June 2019, FleetCor acquired payroll card provider SOLE Financial acquisition to expand its paycard offerings into the SMB segment, complementing its large and mid-size company focus.It was approximately at this time Comdata first launched its Fintwist application.

Comdata’s OnDemand solution and its Fintwist debit Mastercard are currently available only in the U.S. Radin noted that Comdata has a product development roadmap to add additional features in the next 12 months and that possible international expansion could be possible if the opportunity presents itself. Radin added that EWA services are actively used in Canada and the U.K. and that any expansion would require partnering with other Fleetcor global units.