In the employer struggle to find workers, there may be a $12 billion fintech opportunity

In the employer struggle to find workers

By Emily Bary

Younger workers are demanding quicker access to their wages in what could drive the biggest change to the payroll industry in decades

A growing interest among younger workers to access their pay more quickly could create a $12 billion market for payroll providers and earned-wage upstarts that seek to disrupt the traditional idea of pay periods. 

Fintech companies see a big opportunity to speed up access to earned wages, especially for hourly employees with tighter cash-flow needs and a greater proclivity to use costly and predatory options like payday loans to make ends meet. The technology, which can allow workers to receive their wages at the end of a shift, may drive the biggest change to the payroll industry in decades following a long stretch of monthly and then biweekly pay cycles. 

Companies providing access to on-demand wages say they’re seeing a surge of corporate interest given the current labor market as businesses in sectors like retail and restaurants struggle to recruit workers. One Missouri Arby’s location lists “DAILY PAY” as the first bullet point in its job posting for a team-member position. DailyPay, a startup recently valued at upwards of $1 billion, says it works with some Arby’s franchises to provide this service.


Mizuho analyst Siti Panigrahi attributes the trend partly to a gig-worker mentality, and companies like Uber Technologies Inc. UBER, -1.37% and Lyft Inc. LYFT, -0.93% now let their drivers request early access to earnings. More millennials are asking: “Why should my employer hold my money that I earned for 15 days?” Panigrahi said. 

The total addressable market for these services could be $4.2 billion to $12.2 billion in the U.S., according to Baird analyst Mark Marcon. 

See also: Why online-travel giant Booking is getting into the fintech game

On-demand pay is currently most prevalent among workers in industries like grocery, restaurants, and hospitality, where there is a strong need for quicker access to wages, but DailyPay Chief Executive Jason Lee expects that companies will gradually give the option to salaried workers as well, given a general move in the financial-services industry to get people their money more quickly. We’re used to picking up the tab for a friend’s coffee and immediately receiving reimbursement through services like Venmo, he said, and he believes more people will start having a similar expectation of their employers as well.

“We have squeezed the toothpaste out of the tube and it’s hard to put it back in,” he told MarketWatch. 

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