Ceridian redefines how employees get paid with its Dayforce Wallet

The company is redefining the standard pay cycle, offering on-demand and early pay for employees, in addition to financial wellness initiatives.

Ceridian, a global human capital management (HCM) company, announced last Wednesday that it's partnering with digital banking marketing platform Cardlytics to bring rewards to its Dayforce Prepaid Mastercard in March with Dayforce Wallet Rewards, in part to promote client's financial wellness.

Starting in March, cardholders will earn rewards with select merchants near where they live. When it launches, a reward tab will be available in the app where users can see different merchant offerings, the amount of cashback they can earn and monitor how much they're accumulating. Everything will be handled within the Dayforce Wallet app, and rewards are currently offered with over 100,000 merchants.

The rewards are automatically added back into the wallet and can be used with the card. The Dayforce Prepaid Mastercard comes with standard fraud protection and dispute resolution.

The Dayforce Wallet offers employers an alternative way to pay employees. It costs employers and employees no additional fees to use in the US and Canada and offers on-demand pay as well as two-day early direct deposit. The wallet aims to give employees more control over their finances and evolve the way payroll works for employers.

"The driving message behind all of this is employee empowerment," Aaron Fuchs, vice president of Commercial for Dayforce Wallet at Ceridian, told ZDNet.

The wallet, app and card are all designed to provide employees greater control over when they can access the money that they've worked for. The products were also built to help consumers living paycheck to paycheck avoid digging themselves further into debt. The Dayforce Wallet and debit card feature no monthly fees and accrue no interest.

"The options for many individuals who access cash in between pay periods are both very limiting and very expensive. They carry a lot of additional interest, and they further the debt trap that individuals find themselves in," Fuchs said. 

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From carrying a balance on a credit card to taking out a loan, while sometimes necessary for consumers, could also potentially dig them deeper into debt. By allowing employees to go to work and leave at the end of the day with their wages immediately available in the Dayforce Wallet, employees could experience less financial stress and have more control over their finances.

"When you simply know your funds are there, I think that is a real form of empowerment for an individual, and I think it has an impact all the way down the line," Fuchs said.

Fuchs said that with the technology available today, we should look at payroll and see how we can evolve it to better suit both employees and employers. The current cycle of employees working a shift and then employers receiving essentially an interest-free loan and paying it back to employees in a weekly, bi-weekly, or monthly structure seems antiquated.

"It's time to evolve the way we think about pay, as we evolved so many other practices, and that usually means we've given people access to things faster and in a more on-demand fashion," he said.

The idea of on-demand pay -- one of the main features of using the Dayforce Wallet -- doesn't only benefit the employee. It can also ease some of the pain points employers experience around payroll and employee retention, and satisfaction. It's less to manage and creates no additional work, Fuchs said.

In a Ceridian study conducted by The Harris Poll, researchers found that 78% of employees would feel increased loyalty to their organization if they were offered on-demand pay at no additional cost (something the Dayforce Wallet provides). 81% of participants indicated they would take a job with an employer that offered on-demand pay at no additional cost.

The wallet's "always-on" technology continually calculates the employee's net to gross income and then allows the employee to bring forward some or all before payday. "Where you receive your pay, that's your source of financial input through your own financial management. From our standpoint, it seems like a really logical place to evolve the thinking of payroll," Fuchs said.

The funds are directly deposited into the employee's wallet for them to access, with no additional fees charged to the employer or employee. Each request to access funds by an employee is treated as a fully compliant payroll.

Ceridian built the on-demand pay into its core ATM suite to be fully compliant. "We feel confident that the way we built the product in the first place, and the compliant nature of it, is really important for employers in that respect," Fuchs said.

The addition of rewards is part of an initiative with Cardlytics to promote the financial wellness of Dayforce Wallet users. 

"Putting cash back into the hands of [Ceridian] customers while also promoting more conscious spending on everyday purchases is something we are very proud to be a part of here at Cardlytics," said Farrell Hudzik, executive vice president of financial institutions at Cardlytics in a statement provided to ZDNet.

Ceridian plans to roll out more financial wellness programs in the future, including a spending management tool and a savings goal program where users can set financial goals and even see how picking up an available shift would contribute to reaching that goal.

"Based on what I've talked about every single day with employers, we're marching up this hill towards a really logical employee benefit, and it's going to be a really interesting year to see where [on-demand pay] goes," Fuchs said.

The Dayforce Wallet is currently live in the US and Canada, with plans to launch in the UK.

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