Fintech Revolut has launched another new innovative feature, Payday, allowing users early access to their wages. Here we take a look at how it works, the pros and cons, and what it will cost.
We all know what it feels like to be stuck for cash towards the end of the month. Whether it’s having to pay for a bill or another necessary cost or expense, we’ve all been there.
Having to wait for your salary often means many employees are forced to take out payday loans or expensive credit card options to simply tide them over, which isn’t always prudent.
That’s where Revolut comes in with yet another innovative financial solution for consumers!
The global fintech has announced the Irish launch of its financial product ‘Payday’ which aims to relieve the financial stress many workers face between monthly paydays by allowing you to access part of your salary early.
The launch for Irish customers follows a UK launch last month, with Revolut planning to do so in the EEA and US soon.
So, how does it work and will it cost me? We take a look.
About Revolut Payday
Payday is Revolut’s new earned wage product that gives employees the power to instantly access a portion of their salary as they earn it.
The new service works through Revolut linking in with an employer's payroll system and allowing employees to draw down part of their wages earlier in the month should they want or need to.
So, if you’re stuck before getting paid, all you have to do is log in to the app, view your accrued earnings and choose the amount you want to withdraw, and directly into your Revolut account - where else?
Importantly, using Payday will have no impact on your credit rating and is simply a lower-cost alternative to high-cost credit cards or payday loans, which some consumers sometimes rely on to help with cash flow from month to month.
Sounds...well, great! So what’s the catch?
Ts & Cs
As always, there is a catch to these things, but this time it’s actually not too bad we’d argue, especially for the convenience.
If you want to draw down some of your salary early you’ll have to pay a flat fee of €1.75 per withdrawal.
So, if you were to take out money four times a month, as you earn it, you’ll be paying €7. That’s regardless of the amount you take out, which is quite expensive, all things considered.
Sustaining that over a full year would cost you €84, so quite a lot for early access to the money you’ve earned.
On the other hand, for someone taking out money once a month, that’s a total cost of €21 per year, so not as expensive.
To launch Payday, Revolut has partnered with Spectrum Life, a leading provider of employee mental health and wellbeing services in Ireland and the UK.
As launch partner Spectrum Life will offer the salary service as part of the benefits package it provides to companies in Ireland such as Accenture, Laya Healthcare, Microsoft and Vodafone.
To find out if your employer is offering Payday through Revolut, simply go to the hub section of the Revolut app, click on Payday and search for your employer.
Speaking about the launch, Joe Heneghan, CEO of Revolut Europe, said:
We believe in the importance of making financial well being 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.
We are particularly proud to have worked with Spectrum Life as our Irish launch partner. Their leadership in the employee wellbeing space reinforces what financial health can do for mental health.
First and foremost, it should be said that this new product from Revolut, on the whole, is pretty, pretty, pretty good! We’ve all needed a dig out with our finances once and a while and having a backup to relieve that financial stress is a godsend.
Payday is designed to allow you access money you’ve earned (for a small fee, of course), without you having to take out a loan and go into debt - so it’s a very clever and convenient service.
What’s particularly positive about the product is that it doesn’t affect your credit rating, which taking out a payday loan or expensive credit card might, should you fall into arrears.
By using Payday, you’re simply paying to access the money you earned but earlier.
Interestingly, some people who get paid a salary monthly might even be happy to pay €84 per year for the convenience of getting paid weekly.
In short, Payday removes a lot of the financial stress of having to wait to get paid. That being said, it could become too convenient...
As you can see from the examples given above, this new service from Revolut isn’t cheap, particularly if you’ll be using it quite a lot - which I’m sure Revolut wants you to do.
However, that’s not the point of the service. Payday should only really be used if you need it and not for convenience’s sake.
This is also somewhat at odds with Revolut’s message of financial well being which it always mentions. Yes, it does help you to avoid reliance on high-cost short term credit products such as payday loans, but it doesn’t instil good budgeting habits which are essential for managing your day-to-day finances, and could potentially lead to an overreliance on fast credit, which, let’s face it, is you paying for the money you’ve earned.
To sum up, Payday is yet another interesting innovation from the fintech, helping to solve a problem faced by consumers.
However, Payday is very much a service of convenience and necessity and not a thing to take advantage of all the time.
Compare digital banks on bonkers.ie
In recent years, we’ve seen a rise in the popularity of digital banks in Ireland. This is no surprise really given all the additional benefits they have to offer compared to traditional banks.
If you’re considering signing up for a digital bank, take a look at our comparison on N26 versus Revolut for a comprehensive review of both. Alternatively, you can listen to our recent podcast episode on N26 versus Revolut here.
It’s important to remember that technically Revolut isn’t a bank, so if you’re looking for a more traditional current account option, head over to our current account comparison page. You can easily compare different current account features and charges from all of Ireland’s main banks with our comparison tool in just a few clicks.
To learn more about various current accounts on offer, why not have a look at our blog on which bank has the best value current account at the moment?
Get in touch with us
What do you think of Revolut’s new feature? Would you avail of the opportunity to instantly access your earnings before payday? We’d love to hear from you in the comments below!