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UK digital banking start-up Revolut has announced that it will allow customers to access up to half their monthly salary before they are paid.
Using the ‘Payday’ service, workers will be able to draw out wages they have already accrued for a flat fee of £1.50 each time.
Eligible customers will be able to access the service from the Revolut app, and will only be able to withdraw money they’ve earned but not been paid yet.
Revolut’s app will link to an employee’s payroll system and the company said it is in the process of partnering with UK employers to make this possible.
Chief executive Nik Storonsky said the option would help employees deal with the financial uncertainty facing them since the pandemic hit, reducing the risk of them turning to payday loans or other expensive forms of alternative finance.
He said: “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. 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.“
Using the service will have no impact on an employee’s credit score, he added. The service will initially be available to UK employees, with European and US workers to follow.
Although Revolut is the first banking company to offer earned wage access, it has been growing in popularity in recent years, accelerated