DailyPay Review – Wages on Demand
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DailyPay is an earned wage access app that lets employees access their earned wages before the next payday.
8/10
Cost
8/10
Ease of Use
8/10
Features
8/10
Services
8/10
Chasing cash is never fun, especially when you already worked to earn it. Some consumers turn to cash advance apps to fill the gap, but some are better than others. While other cash advance apps let you access a few hundred dollars, DailyPay gives employees access to the entire paycheck. Instant access to your earned wages can help you avoid overdraft fees, short-term loans, and higher credit card debt. DailyPay gives employees more control over their finances and offers a lot for business owners. Empowering your employees can increase their loyalty to your company and improve employee retention rates.
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What is DailyPay?
DailyPay is an earned wage access app that lets employees access their earned wages before the next payday. On-demand pay can boost company morale and loyalty by making employees feel appreciated.
Jason Lee and Rob Law founded DailyPay in 2015 and designed it for business owners and employees. You can download it from the app store. DailyPay is a financial services app that easily integrates with payroll systems and doesn’t increase the payroll team’s workload. Employees can access all of their unpaid wages for a small fee. DailyPay employees only have to pay up to $3.99 for an instant transfer or $1.99 if they can wait until the next day.
Some of the most established companies use DailyPay to make earnings more accessible. Kroger, Adecco, and Dollar Tree are some companies that use the EWA app for their workers.
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How does DailyPay work?
DailyPay integrates with payroll software to help employees access their unpaid wages instantly. Employees can sign up for a DailyPay account by providing their email address and creating a password. After you sign up, DailyPay will request a payment method. You can input the details for your bank account, prepaid debit card, or pay card to receive your earnings. You do not need a social security number to use DailyPay.
While this sounds simple enough, your employer needs to become a DailyPay Partner for the app to work for you. You may have to pitch DailyPay to your employer and explain how it can increase employee productivity and retention. DailyPay has an Employers page that details the advantages of enabling on-demand pay. This page also prompts employers to talk with a member of the DailyPay team and get a demo.
How much does DailyPay cost?
DailyPay does not charge employers to use the software, and employees won’t have to pay to open an account. However, it does charge a small fee for each money transfer. Employees can choose to pay up to $3.99 for an instant transfer or $1.99 for a transfer that takes a few business days. These fees represent the only cost associated with using DailyPay.
The fee structure benefits people who can wait a few days before accessing funds. It reminds me of Stanford’s Marshmallow Experiment, where people could receive a marshmallow now or wait 15 minutes and then receive two marshmallows. You can save $1 per withdrawal just by waiting a few days. Giving yourself enough of a buffer in your savings can give you more time to wait for the funds to arrive.
DailyPay’s features
DailyPay has several features that make it an attractive choice for businesses and employees.
Seamless integration
DailyPay operates in the background and works with a company’s payroll software. It has many app integrations, so businesses can pair DailyPay with their favorite resources.
100% earned wage access
Some EWA apps only let employees access 50% of their wages. You can also use a cash advance app to get a few hundred dollars, but DailyPay is one of the few apps with 100% EWA. If you made $100 today, you can access that $100 right away.
Flexibility for workers without bank accounts
Workers do not need pre-existing bank accounts or social security numbers to receive payments through DailyPay. Employees can opt for a reloadable Visa prepaid card through Friday by DailyPay. The EWA app has several payment options that let you bypass these common requirements.
Spending and earnings in one dashboard
DailyPay shows an employee’s spending and earned pay in the app. This dashboard makes it easier to manage income and expenses. Since using a spreadsheet to track my income and expenses, I have gotten much better with my money. DailyPay tracks the essentials so you can improve your financial plan.
Real-time payments
Employers can reward employees with real-time payments through DailyPay. When the business makes the payments, the employee does not have to worry about the fee. This feature can increase employee retention and make payouts less complicated.
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Who is DailyPay best for?
DailyPay is better for some people than others. Here are some of the groups that would benefit the most from setting up DailyPay.
Business owners
Every perk you give to your workers gives them another reason to continue working with you. Retaining talented employees can help you stand out in the competition and reach new customers. On the other hand, losing great employees can put your company at a disadvantage.
While each perk can help, easier access to wages can go a long way. DailyPay does not cost your business any money and runs in the background. It isn’t one of those business tools that becomes more annoying than convenient.
Your employees will have more control over their finances, which can translate into higher productivity. If your workers are less worried about their finances, they can arrive at work daily with fewer distractions.
Employees living paycheck to paycheck
Over 65% of people live paycheck to paycheck, which makes them more vulnerable to surprise expenses. The weekly payday may not be enough for these consumers to cover living expenses and other costs. Many of these employees turn to payday loans and other types of short-term financing to fulfill their obligations.
DailyPay gives these workers more flexibility when a surprise expense shows up. Employers can enable on-demand pay for their workers so they are prepared for emergencies. It can provide greater peace of mind if workers know their recent wages are immediately accessible if necessary.
Who shouldn’t use DailyPay?
DailyPay is not for everyone. These groups of people may not benefit as much from DailyPay, and it can dig some consumers into a deeper financial hole.
Employees in good financial standing
If you have a large emergency savings account, you don’t need DailyPay. It wouldn’t hurt to have DailyPay, but waiting for payday is better if you have enough funds in your bank account. Why pay $1.99 or $3.99 for each transfer when you don’t need the cash immediately?
People who overspend
DailyPay and other EWAs make cash more accessible. This perk is useful for covering emergency expenses, but it can also enable overspending. People may feel more comfortable spending their money if they know the paycheck is readily accessible. Overspending can hamper savings and make you reliant on DailyPay.
This disadvantage isn’t specifically geared toward DailyPay. Overspending can take place due to any EWA or cash advance app. The fees can add up if you use DailyPay too often. While it’s a great solution for emergency expenses and can be great to have, employees have to use it responsibly.
Pros and cons
Pros
- Receive your earned income right away instead of waiting until the next payday.
- Avoid payday loans and other short-term financing options with high interest rates.
- DailyPay can improve employee retention and productivity.
Cons
- DailyPay fees add up if you request cash every day.
- Using DailyPay too often can lead to overspending and hurt your long-term savings.
- DailyPay invests in its cybersecurity, but with anything online, cyberattacks are a risk.
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DailyPay vs. competitors
DailyPay is a top choice in the earned wage access industry, but it’s not the only choice for employees and business owners. Employees should assess how accessible their wages are, how much they can obtain at one time, late fees, and other factors.
Cash Advance Company | Maximum Cash Advance | Employer Approval Required | Fees |
|---|---|---|---|
DailyPay | 100% of earned wages | Yes | $1.99 for a transfer in one business day or $3.99 for an instant transfer |
Dave | $500 | No | 3% to 5% of the advance amount for an instant transfer. No fee for regular transfers (1-3 business days) |
PayActiv | 50% of earned wages or $250 per pay period | Yes | No fee for direct deposits |
Dave
Dave is a cash advance app that offers banking services. It is not an earned wage access app, but you can request a cash advance of up to $500. The cash advance limit grows as you build up your deposit history. Like the other companies on this list, Dave does not conduct a credit check before letting you access the extra cash.
PayActiv
PayActiv is an earned-wage access app that was founded in 2012. The company offers up to $250 per pay period or 50% of your wages, depending on which amount is smaller. Unlike the other choices, PayActiv does not charge a fee to tap into your earned wages.
FAQs
Is it hard to set up earned wage access?
Most earned wage access tools work with your payroll software already. They operate in the background and give employees greater financial well-being.
How much can you borrow from DailyPay?
You can borrow up to $1,000 per day with DailyPay or 100% of your earned wages, depending on which number is lower. If you need to borrow $1,500, you will have to make two transfers in two days.
How many transfers can I make with DailyPay?
Employees can make up to five transfers each day with DailyPay.
Is earned wage access a loan?
Earned wage access is a loan based on your upcoming earnings. You can access funds quicker with EWA and skip toxic payday loans.
What is the minimum transfer amount for DailyPay?
Employees have to transfer at least $5 from DailyPay if they want to conduct one. You cannot request any amount below $5.
How much of your paycheck can you receive from DailyPay?
You can receive up to 100% of your paycheck from DailyPay, depending on how much you need at the moment.
The bottom line
DailyPay can improve people’s financial health. Accessing wages earlier gives employees the flexibility to cover emergency expenses without incurring overdraft fees or resorting to payday loans. The company charges a small fee for each transaction that can be well worth it for people living paycheck to paycheck.
With most things in life, too much of a good thing can become bad. If you use DailyPay or any EWA solution, build your savings along the way. Building a nice buffer can make you less reliant on instant transfers and give you peace of mind when you approach retirement. Having quicker access to wages along the journey can make unanticipated expenses more manageable.
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Writer
Marc Guberti is a business freelance writer who specializes in personal finance, digital marketing, and entrepreneurship. His award-winning book "Content Marketing Secrets" teaches readers how to create, promote and optimize content for growth and revenue. Marc also hosts the "Breakthrough Success Podcast," where listeners learn how to master content marketing and get more clients.
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