Latest / Leaders In Payments / Financial Inclusion Series: Gino Palozzi, CMO of DailyPay | Episode 255

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Financial Inclusion Series: Gino Palozzi, CMO of DailyPay | Episode 255 · Leaders In Payments

• 0:01
  Speaker 1: Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape.
• 0:06
  Speaker 1: We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments.
• 0:14
  Speaker 1: We will also hear stories from our guests about their journeys to the top.
• 0:18
  Speaker 2: So, simply put, on-demand pay or wage accesses that's often referred to.
• 0:22
  Speaker 2: It enables employees to access or save their pay as they earn it, right, and without having to wait for that traditional payday.
• 0:28
  Speaker 2: It's certainly not alone, right, it's the money they've earned.
• 0:30
  Speaker 2: The way it actually operates you know the mechanics of it is think of Daily Pay as a benefit.
• 0:35
  Speaker 2: It's a benefit that employers want to offer to their folks that work for them, and it's really enabled by, first and foremost, the ability for us to connect into these employers' timekeeping, payroll time and attendance systems.
• 0:55
  Speaker 3: That was Gino Pelosi, the CMO of Daily Pay, and he's my special guest on this episode, episode 255 of the Leaders in Payments podcast, and I'm your host, greg Myers.
• 1:04
  Speaker 3: This is the first episode in our series on financial inclusion.
• 1:08
  Speaker 3: Every year, we dedicate several episodes to highlight what leading companies in our industry are doing to help serve the unbanked and underbanked.
• 1:16
  Speaker 3: Gino and I talk about the on-demand pay solutions that Daily Pay offers to employers and employees.
• 1:22
  Speaker 3: We also talk about the benefits to both the employers and the employees.
• 1:26
  Speaker 3: We go on to discuss how employees can take advantage of these programs to get paid what they deserve when they earn it, which often keeps them away from predatory lenders and also allows them to increase their financial well-being.
• 1:40
  Speaker 3: We've got a great episode ahead, so let's get started.
• 1:42
  Speaker 3: Hi Gino, thank you for being here and welcome to the Leaders in Payments podcast, and especially this special episode during Financial Inclusion Month.
• 1:54
  Speaker 3: So thanks for being here.
• 1:55
  Speaker 3: Well, thanks for having me.
• 1:56
  Speaker 3: Absolutely, let's dive right in.
• 1:58
  Speaker 3: If you don't mind, tell our audience a little bit about yourself, maybe your professional and personal background.
• 2:03
  Speaker 2: Sure, I joined Daily Pay just about six, seven months ago the CMO of the company and my background really was historically in larger organizations where I was leading marketing whether it was at IBM, cisco and this is an opportunity to kind of do something different in my career and I was really looking forward and excited about the opportunity to kind of make a difference, to drive change within these big organizations and to do something that I'm really a strong believer in.
• 2:31
  Speaker 3: Okay, let's talk about the company.
• 2:33
  Speaker 3: Now let's talk about Daily Pay.
• 2:34
  Speaker 3: So tell us what Daily Pay does.
• 2:36
  Speaker 2: At its essence.
• 2:37
  Speaker 2: we're reimagining the way money moves from the moment work starts, and what I mean by that is we're really partnering with some of the Americans leading companies in connecting into their payroll and time and attendance systems and their human capital management systems to provide employees with this real-time view and access to their pay as they earn it.
• 2:56
  Speaker 2: It's a platform that gives users that real-time visibility into their balance and their funds as they work their way throughout that pay period, and we've seen Daily Pay users, who often have been in many cases, reliant on either credit or overdraft, really be able to set aside their hard-earned money now.
• 3:16
  Speaker 2: So it's an opportunity to not just give them visibility and control over it, but to kind of get out of this cycle of debt and challenges that many of us have faced at different points in our lives.
• 3:26
  Speaker 3: Okay, and how would you define on-demand pay or, I think, more commonly known as earned wage access?
• 3:33
  Speaker 3: How do you specifically define that?
• 3:35
  Speaker 2: So, simply put, on-demand pay or wage accesses that's often referred to.
• 3:39
  Speaker 2: It enables employees to access or save their pay as they earn it and without having to wait for that traditional payday.
• 3:45
  Speaker 2: It's certainly not alone.
• 3:46
  Speaker 2: It's the money they've earned.
• 3:48
  Speaker 2: The way it actually operates, the mechanics of it is think of Daily Pay as a benefit.
• 3:53
  Speaker 2: It's a benefit that employers want to offer to their folks that work for them and it's really enabled by, first and foremost, the ability for us to connect into these employers' timekeeping, payroll time and attendance systems.
• 4:06
  Speaker 2: It's able to accurately, because of that connection, offer users access only to the money that they've earned, which is really important.
• 4:13
  Speaker 2: That allows them to have that peace of mind that they're not advancing money.
• 4:18
  Speaker 2: It's not alone.
• 4:18
  Speaker 2: It's money that they've earned and the systems and the connections that we offer are certainly enabling that.
• 4:24
  Speaker 2: It's positioned as it should be, as a benefit to their employees, that this is an option and an opportunity for them to Get to the money or see the money that is available to them, and they want to see how much money they've made so far in the pay cycle.
• 4:38
  Speaker 2: Often they do often go in, look at that and they'll want to access that money sometimes and if they do want to access their money.
• 4:45
  Speaker 2: They do have three options right.
• 4:47
  Speaker 2: The first is a no-fee transfer option to any account.
• 4:50
  Speaker 2: That typically takes one to three business days to clear.
• 4:52
  Speaker 2: The second is another no instant fee.
• 4:55
  Speaker 2: There's no fee, no instant transfer where they're using the Friday by daily pay card.
• 5:00
  Speaker 2: This is a general purpose Reloadable card that allows those daily pay users to access to their earned wages at no fee Right, as long as they update their direct deposit to that Friday card.
• 5:11
  Speaker 2: And the third right is the instant transfer to any account.
• 5:14
  Speaker 2: That's typically three dollars and forty nine cents and think of that as a ATM fee.
• 5:18
  Speaker 2: That connections that we're providing is somewhat unique in the market because at that point it's certainly not a loan, it's certainly not an advancement.
• 5:27
  Speaker 2: It's the money these people have earned and we're just giving in that ability in the rails to kind of go in and see that Information and to access it as the CFET.
• 5:36
  Speaker 3: Okay, and obviously there are benefits to the employers and there's benefits to the employees.
• 5:41
  Speaker 3: Let's talk about the benefits to the employers first.
• 5:44
  Speaker 3: So why does a company, one or need this kind of on-demand pay program?
• 5:49
  Speaker 2: It's helping employers in many ways.
• 5:50
  Speaker 2: Right in today's day and age, employers need to offer flexibility, meaningful benefits to attract, to retain talent, right, instill.
• 5:57
  Speaker 2: What is considered is still a tight labor market for many industries.
• 6:00
  Speaker 2: Our data shows that daily pay is an incredible positive impact on hiring and retention.
• 6:05
  Speaker 2: The average tenure for employees who use daily pay is shown to increase by 35 percent over non daily pay users.
• 6:12
  Speaker 2: And daily pay also keeps their employers happier, right, more engaged, more productive.
• 6:16
  Speaker 2: 48% of our users say they're more motivated to remain with their employers because they offer that daily pay benefit.
• 6:23
  Speaker 2: At 52% had said because of daily pay, they have a more positive opinion of their employer.
• 6:28
  Speaker 2: So that's certainly something we're proud of and certainly the clients that we speak to have seen in the data shows it.
• 6:34
  Speaker 2: Sure, absolutely.
• 6:35
  Speaker 3: Well, you are there, certain industries or segments or verticals, whatever you want to call them, where these types of programs are a better fit.
• 6:42
  Speaker 2: We like to think everyone should have the option of earn wage access, but our clients do span a number of industries.
• 6:48
  Speaker 2: Certain ones in particular find it very attractive and appealing, including retail restaurants, hospitals, health care, your grocers and supermarkets.
• 6:57
  Speaker 2: In many of the top country, you know, the country's top employers have partnered with us right including companies like Target, hilton, kroger, dexporting Codes.
• 7:06
  Speaker 2: Seven of the top 10 fast food restaurants use daily pay, so it spans many industries, but, as you can imagine, we believe that this is the future.
• 7:15
  Speaker 2: This is something that isn't necessarily limited to certain industries and as people start seeing that this becomes the status quo and the norm, we're going to see more and more industries and more and more companies within those industries pick it up and adopt this as kind of the norm.
• 7:29
  Speaker 3: Sure, makes a lot of sense.
• 7:30
  Speaker 3: Well, we discussed the employer side, so let's discuss the employee side.
• 7:35
  Speaker 3: So can you talk about the benefits to the employees?
• 7:39
  Speaker 2: From an employee perspective, it empowers those users, those folks, with the choice and control over their own pay.
• 7:45
  Speaker 2: It gives them that kind of freedom and that what I say peace of mind that they can pay their bills, spend or even save and invest on their own schedule, right, not constrained by this arbitrary payday that we've all kind of grown up in.
• 7:58
  Speaker 2: It's really important to understand that.
• 8:00
  Speaker 2: We did a study, I believe, and it was conducted by ITA and a Verica group, and it showed that 95% of those folks who are previously relying on payday loans either stopped using those payday loans or reduced their use.
• 8:12
  Speaker 2: Right, and users don't just get out of that cycle of relying on credit or relying on payday loans.
• 8:19
  Speaker 2: I think this whole concept of having that control and visibility, where they're checking on average their balance like once a day, and that indicates that hourly workers and earn wage earners are looking for height and transparency around how much they're making.
• 8:33
  Speaker 2: It's really interesting to watch that phenomenon too, because they enjoy seeing their earnings run real time.
• 8:39
  Speaker 2: It's almost like a gamification, but it's giving them essentially that peace of mind that the money is there, they've earned it and they can use it as they need it or see fit Okay.
• 8:48
  Speaker 3: We've talked a little bit about this, but this is financial inclusion month and I think part of the goal of this podcast series is to highlight companies like Daily Pay that are doing things to help with the challenge.
• 9:03
  Speaker 3: It's a global challenge, but with the challenge of financial inclusion and financial wellness.
• 9:07
  Speaker 3: So what are companies doing?
• 9:09
  Speaker 3: They adopt this daily pay concept or on-demand pay and they have to get that out to their employees.
• 9:16
  Speaker 3: What do they do to promote the financial inclusion aspect, like the financial wellness?
• 9:21
  Speaker 3: Do they provide classes or what is it that they do for their employees to help promote the financial wellness aspect of this?
• 9:28
  Speaker 2: Yeah, I think part of the benefit is not just the access and the visibility.
• 9:33
  Speaker 2: We also offer things like free financial advice and counseling right, and we do that through a really interesting group that's helping us to kind of bring together the insights that these folks need to understand how do they save, how do they invest, and that service is offered as a perk, if you will, of the benefit.
• 9:51
  Speaker 2: So it's often leaned into and it's shared.
• 9:53
  Speaker 2: Not everybody takes advantage of it.
• 9:55
  Speaker 2: We'd like to see more people take advantage of it.
• 9:57
  Speaker 2: But it's those types of perks that we talk about and we make sure that people understand that.
• 10:02
  Speaker 2: Access is one thing, but having that understanding of how do they actually improve that and what we're seeing is when companies put this out on the table, they put it out there like any other benefit and they communicate it during enrollment periods.
• 10:15
  Speaker 2: But we want to partner with them to make sure that they understand the full breadth of what this is enabling them to do.
• 10:20
  Speaker 2: So we do work with those clients and we do things through traditional communications, through the client, on behalf of the client, to help them communicate the benefits and the flexibility that this provides.
• 10:33
  Speaker 2: So, as you can imagine, standard things like on their benefits pages, communicating and communicating on their behalf, often for the clients that we support what is available, how does it work, why does this help them?
• 10:46
  Speaker 2: And then some of those other perks that I talked about that are also there to make sure that they know that this isn't about just getting your money and spending it.
• 10:53
  Speaker 2: It's about understanding and that control that you have and what you can do with it.
• 10:57
  Speaker 2: And one of the things that we introduced, I believe, last year, was the save functionality, which we're seeing people take advantage of, which is now you don't only have access to pay your bills, but you can actually invest or save your money before payday, and we're seeing some of that pick up and, in communicating those types of benefits, is really important to set aside that money, to understand that.
• 11:19
  Speaker 2: How do you manage that cash flow?
• 11:22
  Speaker 2: We don't always believe that people use the service because they have a urgent need.
• 11:27
  Speaker 2: It is the case sometimes and that's fine, but there's other things that you can be doing right and there's other things that you can learn about, and making that part of the communications up front, when the benefit is offered In partnership with the client, is really important to us, and we continue to find ways to communicate that ad and enhance the things that we offer within the app, to kind of go further than just giving you access but helping you understand how to best stretch those dollars and invest those dollars and save that hard earned money.
• 11:54
  Speaker 2: It's really part and parcel with everything that we communicate, from the point that we start with a company through the ongoing partnership to drive awareness of that and hopefully adoption has more and more clients see the benefits of it and more and more users wanna take us up on that.
• 12:10
  Speaker 3: Yeah, and one of the areas that has come to light, at least for me and having done I think this is the third year we've done this series is the unbanked and underbanked reliance on the payday loan industry and that predatory lending space, and obviously this can help with that.
• 12:28
  Speaker 3: So do you see or hear stories or have knowledge of, maybe people who are in that underserved or underbanked community seeking out companies that offer this type of benefit because they know it can help them stay away from those types of things?
• 12:46
  Speaker 2: Yeah, 100%.
• 12:47
  Speaker 2: I think that we see daily pay as a payday loan killer.
• 12:51
  Speaker 2: We don't believe that that is a model that is effective or something that we encourage, and we wanna give people options right.
• 12:58
  Speaker 2: So when we start looking at the stats of how people have actually been able to get off of that cycle of debt and cycle of leveraging those types of things, it makes us very happy and proud as an organization, and I think the data that I mentioned already is pretty clear.
• 13:13
  Speaker 2: I think nine out of 10 have said that they've been able to reduce or significantly reduce the use of that.
• 13:20
  Speaker 2: And when I say and most of that is, I think, 81% of that 95-ish number, percent number 81% have stopped altogether and 15% or so have actually reduced their usage and reliance on that, that in itself makes us proud and it's really.
• 13:38
  Speaker 2: Our mission is to help people go to mechanisms that they deserve right and this is their money right.
• 13:44
  Speaker 2: This is not a loan and this should never be the option.
• 13:48
  Speaker 2: The first choice of what you need to do right Is to go to one of those routes.
• 13:51
  Speaker 2: This gives them that freedom and that option to really take back control of the money they've earned and get out of that bad cycle of relying on credit, relying on payday loans, and it's certainly a big message and benefit that employers want too, because people that are under financial stress often have to take on another job or they definitely are distracted or they're not as productive.
• 14:14
  Speaker 2: Right, when you can relieve that stress as an employer, they benefit as well.
• 14:18
  Speaker 2: Right, and that's one of the benefits that I believe kind of is certainly one that is gonna be what we wanna really hang our hat on here, which is there's a better way, there's a new way.
• 14:28
  Speaker 2: Why do we have to rely on this two week payday?
• 14:31
  Speaker 2: It's your money, it's your earned wages.
• 14:34
  Speaker 2: Why rely on a unscrupulous or very financially difficult situation where you get yourself tied into a payday loan which is exorbitant rates and whatnot?
• 14:44
  Speaker 2: This gets you out of that and gives you another choice, and we're really proud of that.
• 14:48
  Speaker 3: Yeah, and I would assume that the reloadable card and having money going directly to that I would imagine is for those who maybe don't have a checking account right is a huge advantage.
• 15:00
  Speaker 2: For those folks.
• 15:01
  Speaker 2: There are many people, surprisingly still, that are either underbanked or unbanked and this gives them the option in the Friday card.
• 15:09
  Speaker 2: This reloadable cash card gives them that choice of where they can send their money and freeze up and reduce the friction, of where they can move their money quickly not just move their money, but to then use it and freely spend it as they need in CFET.
• 15:22
  Speaker 2: So I think it's really helped in many ways for people to say I don't have a direct deposit option.
• 15:28
  Speaker 2: This does now give them that option, like they need often to say where am I gonna send my money?
• 15:35
  Speaker 2: How do I get my money there quickly?
• 15:36
  Speaker 2: And then gives them that kind of reduce the friction and allows them to spend it freely, right as they need it, on the things that they need when they need to spend it.
• 15:45
  Speaker 2: So yeah, we're really excited to help open up a whole new area of opportunity for people that might not have some of the same options and banking choices to say I don't have a direct deposit option, but now I do.
• 15:58
  Speaker 2: I have a way to move my money and use it as I see fit, when I need it, how I need it.
• 16:03
  Speaker 2: So yeah, we're really excited about that as well.
• 16:05
  Speaker 3: I love the fact that these employees have options.
• 16:09
  Speaker 3: You give them those three options you mentioned earlier.
• 16:12
  Speaker 3: I love the transparency of it, them being able to see their balances and all of that.
• 16:16
  Speaker 3: So I mean there's obviously a lot of value in this.
• 16:19
  Speaker 3: But with anything like this come some misconceptions.
• 16:22
  Speaker 3: So can you talk about maybe what are some of the misconceptions in this space and then what you guys are doing to overcome them?
• 16:29
  Speaker 2: Yeah, I think the biggest is we are not alone, right.
• 16:32
  Speaker 2: We are not a bank, right.
• 16:34
  Speaker 2: We're just helping to move that money more freely right from the employer to the employee.
• 16:38
  Speaker 2: It's not a lending or credit product, right, and it has none of those characteristics or attributes of a loan.
• 16:44
  Speaker 2: And that's still something that we communicate and have to make sure people understand, right from the employers to the employees who decide to sign up.
• 16:52
  Speaker 2: We don't conduct things like credit checks, we don't report back to credit agencies, so all these things that have some negative connotations or fears.
• 17:01
  Speaker 2: We just have to eliminate that and communicate that this is really the mechanism for you to get to your money that you've earned, and we're just there on behalf of your employer to make that money accessible to you.
• 17:12
  Speaker 2: It also is important to think about how we extend that.
• 17:15
  Speaker 2: It's not just earn-weage access, right.
• 17:17
  Speaker 2: We're delivering to our clients, right, the data-driven strategies that they're looking for to help them hire and retain.
• 17:25
  Speaker 2: So it's beyond just get your people access to their pay.
• 17:28
  Speaker 2: That's really important and I think that's benefits that we all can recognize and see.
• 17:32
  Speaker 2: But we also offer products like the coaching that I mentioned right in counseling millions of daily pay users, and that's run by a veteran run coordinated assistant network.
• 17:42
  Speaker 2: So we're trying to do good and we're trying to offer things that not everyone has access to, so that advising and coaching is really something that we want to say sets us apart.
• 17:53
  Speaker 2: And they don't realize that it's not just access, it's like more, it's more benefits, it's more valuable to their people to think about how do I get access and how do I use it in an effective way to meet my goals, to not only meet my needs but my wants and, ideally, their dreams, which might seem a little extreme, but it's not right, because, at the end of the day, when you start managing your cash flows and your money better, you start opening up opportunities that might not have been there when you don't have access to those types of things.
• 18:22
  Speaker 2: And the other feature I think you know I talked about, but this auto save feature is really important to, again, not just access to your money so you can use it.
• 18:30
  Speaker 2: Many people can start actually saving and why wait to save?
• 18:34
  Speaker 2: If I've earned my money, how do you have the mechanism to set your money aside?
• 18:38
  Speaker 2: Pay yourself first if you will, and it allows them to not just say, but to automatically save a certain portion of their money as it starts being earned.
• 18:46
  Speaker 2: These are all things that we want to communicate and say this is what sets us apart.
• 18:52
  Speaker 2: We're really advocating for the employees at the heart of it, and we want them to not just free themselves of those payday loans and the challenges that they present, but to start thinking differently about their pay and expect things differently, because, as they change their behavior, as we help facilitate access and insights into how to use it and how they can be setting aside money or saving money, it gives them even additional, more freedom, if you will, to do the things that they need, they want and they hope to achieve.
• 19:22
  Speaker 3: I love that save aspect as well.
• 19:23
  Speaker 3: So what's on the horizon?
• 19:24
  Speaker 3: What's next for this?
• 19:27
  Speaker 2: on demand pay space yeah, I think, as we think forward here, our vision is ultimately to make on-demand pay the status quo.
• 19:34
  Speaker 2: It should be the default way that people are paid.
• 19:37
  Speaker 2: We're really trying to bring earn-wage access everywhere, instead of making it a choice or an option that some companies offer, that it just should be expected.
• 19:46
  Speaker 2: It's something that we would like to say.
• 19:49
  Speaker 2: Why stick to this arbitrary two-week payday when there's a better way?
• 19:54
  Speaker 2: If you've earned it, why shouldn't you have access to it?
• 19:56
  Speaker 2: And that's going to take some time, but we're starting to see these big companies and clients come on board with us, and I think that, ultimately, is where we want to go is to make this something that isn't just.
• 20:07
  Speaker 2: Should we do it?
• 20:07
  Speaker 2: Why are you not doing it?
• 20:09
  Speaker 2: Because I think the employees that work hard and help these companies achieve things they deserve that.
• 20:15
  Speaker 2: They deserve to have this as an option, and that's something that we're working and committed to making happen.
• 20:21
  Speaker 2: So we're excited about that.
• 20:22
  Speaker 2: We're excited about the prospects of this becoming more and more widely accepted, and we're starting to see that come to fruition a little bit with some of the regulations that have been out there, that have been discussed.
• 20:33
  Speaker 2: We're seeing Nevada, we're seeing Missouri pass regulations that are making this more controlled and we welcome that we actually embrace regulation coming because I think there's a way that we want to operate in the way we believe earn-wage access needs to proceed and that regulation is only going to support our vision of making this a trusted, secure, effective way.
• 20:57
  Speaker 2: That should become the norm and not the exception.
• 21:01
  Speaker 3: Right.
• 21:01
  Speaker 3: Well, Gina, we've covered a lot of ground already.
• 21:03
  Speaker 3: Is there anything else you'd like to add before we wrap up the show?
• 21:07
  Speaker 2: I'm excited to work for a company that has such a big altruistic vision of what we want to do to change pay for good, which is a little bit of a tagline as a marketer, but I think it's really something that we live and breathe as an organization and I'm excited about how we, as a company Daily Pay has really created this market.
• 21:25
  Speaker 2: Now we want to move it forward in a positive direction and we're committed to that and we continue to do things that I'm excited to be a part of and we're, as a company, putting our heads down and helping work with our clients, work with the employees, listen to them and continue to move this in a very positive direction.
• 21:42
  Speaker 2: And I'm excited to continue this journey and see where this goes and see how we can take this and make this even more meaningful for the people that have entrusted us to help them get access to their pay that they've earned.
• 21:54
  Speaker 2: So, other than where we're heading, the sky's the limit and we, like I said, just want to reinforce our commitment.
• 22:00
  Speaker 2: At the end of the day, we advocate for the employees and the benefits that we can help to bring to the table for the clients who entrust us to offer that benefit.
• 22:08
  Speaker 2: So that's where we're heading, and I'm excited to be a small part of it.
• 22:11
  Speaker 3: Yeah, I think that's a great summary to wrap up the show.
• 22:14
  Speaker 3: So, Gina, thank you so much for being on the show today.
• 22:16
  Speaker 3: I know your time is very valuable, so I really appreciate you being here.
• 22:19
  Speaker 2: No, I appreciate the opportunity and we're really looking forward to kind of continuing the dialogue with you and others in the industry as this continues to evolve into a really positive thing for everybody.
• 22:29
  Speaker 3: Great.
• 22:29
  Speaker 3: Well, thanks again for being here.
• 22:30
  Speaker 3: Thank you, and to all you listeners out there, I thank you for your time as well, and until the next story.
• 22:36
  Speaker 1: Thank you for joining us this week on the Leaders in Payments podcast.
• 22:39
  Speaker 1: Make sure you visit our website at leadersinpaymentscom, where you can subscribe to the show and where you'll find our show notes.
• 22:46
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