By Aisling Finn on Thursday 19 August 2021
For £1.50, eligible customers will be able to access their earned salary just a day after the last pay cycle ends.
Financial wellbeing has been at the forefront of consumers’ minds for the last year and a half, and Revolut is today making the pennies stretch a little further to payday.
Revolut is releasing a new product to help customers access up to 50 per cent of their salaries just a day after the next pay cycle has begun.
Called ‘Payday’, the feature is cost-free for employers and only available to eligible customers across the UK, with the EEA and US to follow shortly after.
For just £1.50 per use, eligible customers will be able to dip into the salary that they haven’t been paid yet, allowing them more financial flexibility.
“We believe in the importance of making financial wellbeing accessible to all, and this includes focusing on the impact of financial stability on employees’ mental health. After the difficulties of the past year, the last thing employees need now is financial uncertainty and stress,” Nik Storonsky, CEO and founder of Revolut, said.
“It is important to move away from a situation where many are dependent on payday loans and expensive short-term credit, a reliance that is exacerbated by the monthly pay cycle.“
Payday is not a loan or a credit product and customers will only be able to withdraw money that they’ve earned but haven’t been paid yet, almost like being paid in fortnightly increments rather than monthly.
Although getting an advance on your salary could be seen as a helping hand for many at the moment, when the purse strings are tighter than usual, some warn it could be unhealthy in the long term.
James Andrews, senior personal finance editor at Money.co.uk, said: “Someone budgeting responsibly who already has a savings buffer to cover unexpected bills will see very little benefit from this, which means it’s only helpful to people who are already close to the edge financially.”
“The danger is that people with poor planning will use it at the wrong time, or see it as an excuse not to have to budget or think things through - meaning when bills do come in their debts will rise immediately and they will be charged more overall as they are paying interest for longer.”
The feature is also separate from the ‘Early Salary’ feature that Revolut launched back in December 2020—mimicking Monzo’s ‘Get Paid Early’—which lets eligible customers receive their entire salary a day early.
Now counting more than 16m customers worldwide, Revolut is edging ever closer to creating a financial ‘super app’, with this latest feature adding another notch to its belt.