Why We Do Things the Way We Do

Transparency and Simplicity:  The Two Keys to Financial Wellness


Among the many misconceptions about consumers in the lower income bracket is one that gets to the heart of DailyPay’s approach. Somewhere along the way, it became popular thinking that we can solve the financial problems of the lower income class if we could just find a way to give them a bank account. By providing these “poor, troubled, unbanked people” a bank account, then they would be able to save, manage their finances, and ultimately become financially healthy.


At DailyPay, we don’t disagree that bank accounts are an important aspect of financial maturity. However, this topic reveals a deeper issue about this particular population that is worth exploring.  


Our research indicates that the un- and underbanked demographic is actually choosing to shun banks in favor of “transactional financial service centers.” These transactional centers include short-term lenders and check cashing stores.   


Many of us shudder at the notion of paying $5 to cash a $20 check or 300% interest on a $500 loan. And yet these stores continue to pop up in neighborhoods across the country. According to the St. Louis Federal Reserve, there are now more than 20,000 payday lenders in business across the US. To put that in context, in the US there are 14,146 McDonald’s.


These transactional centers don’t open up because their owners are hoping to entice people when there is no demand. Like any good business operator, they have determined that there is in fact demand that needs to be met. The FDIC agrees. The FDIC has determined that 28% of Americans either don’t have a bank account and/or rely on these transactional centers as their primary provider of consumer financial services.


What is this telling us?

The Market Requires Transparency


Walking into a bank is a bit like walking into a hotel lobby. There are plush sofas, friendly attendants, and if you’re lucky, you may even get a lollipop or a cup of coffee. Look around. What don’t you see? You don’t see prices for various banking products. In fact, the only images on the wall are those of young, happy people using smartphones.


To revert back to the hotel image, notwithstanding this warm welcome, checking out of a hotel can often be one of the worst experiences. When you get the final bill, you are confronted with a multitude of charges that you didn’t expect: “What’s a service charge? What’s a room charge? What’s a luxury room tax?” The $99 room you thought you booked winds up costing $130.  


Many in the demographic we serve have had similar experiences with banks. A “free checking account” results in $30 overdraft fees, $9.99 minimum balance fees, and other unanticipated service charges. With this experience in mind, it is not surprising that a large percentage of the demographic is more comfortable with a check cashing store than a bank. Walk into a check cashing store and you’ll see their services and fees emblazoned on the walls. In many ways, a check cashing store looks a lot more like a fast food restaurant, with all of the prices displayed on posters in big print. No hidden fees. No catches.  No surprises.


And while DailyPay does not align itself with the pricing or business tactics of these transactional financial service centers, we do observe an important characteristic of the demographic: users require transparency.  


This is why DailyPay is only an ATM. Nothing more.  

DailyPAYTM iphone


Users simply:

  1. Tap a button
  2. Receive funds
  3. Instantly into any bank account or any payroll card.


That’s it.


This philosophical approach to transparency and simplicity is the hallmark of our product. We use world-class technology to lower the costs to the consumer and deliver a product that is transparent and simple.

Starving people need food, not pots and pans.


With all of the free budgeting and bill-pay tools and apps available in addition to the libraries worth of financial advice online for free access, according to Bankrate.com, 57% of American adults still cannot cover a sudden $500 expense.


DailyPay’s mission is to give people their first steps toward financial security, and in doing so, to enable companies to reimagine their workforce.  To do that, we have to meet people where they are. Our demographic is asking for a small but important step to give them the feeling of control they lost when they started to get behind on their bills.  The problem that exists today is lower-income earners are paying on average $1,000 per year—or 7% of their take-home pay—in late fees.


Budgeting and bill pay apps cannot solve the fundamental problem that people don’t have enough money to pay their bills on time.  


DailyPay believes deeply that the best way to help people reach financial security is to address the root cause of the problem. By providing a simple, transparent tool—uncluttered by other features or ambitions—we have the best opportunity to help employees (and their employer) reach their financial goals.