S14E6: The End of Waiting for Payday with EarnIn Founder, Ram Palaniappan

The paycheck is today essentially a digital product. Everyone's getting their pay electronically, and it ships every 2 weeks, which is crazy for digital product. You work every day and then you wait 2 weeks to get paid. If other digital products work that way, you probably wouldn't use them. Like if your phone said type your text messages every day and every 2 weeks it would send it out, you wouldn't use that phone. That's the way payroll works.

Welcome back to The Room Podcast Season 14.

Hi, Mads.

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So excited to be here. So excited to be talking about everything that's going on in 2026 in tech.

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Thank you so much for being a part of the community and welcome to season 14 of The Room Podcast. We used Rippling at my startup, Pryve, and one thing that really stood out was how much it simplified workflows that are usually incredibly manual. With other tools, onboarding a new hire, setting up payroll, provisioning apps, and shipping a laptop can take weeks and completely disrupt your flow when you need it most. With Rippling, those workflows happen automatically in one place. That's a big deal, especially early on when every hour matters. Over 15,000 startups, including Cursor, Clay, and Sierra, trust Rippling to scale fast without adding additional ops ops and HR headcount so founders can keep building. So if you or your startup want to move as quickly as you can and focus on what really matters, like your product and your customers, you need Rippling. Right now, venture-backed startups can get 6 months of Rippling startup stack for free. Head to rippling.com/theroom and sign up today. That's R-I-P-P-L-I-N-G.com/T-H-E-R-O-O-M to sign up for 6 months free today. Focus on what you're building. Leave the rest to Rippling. rippling.com/theroom.

Perkins Coie supports the most innovative entrepreneurs and investors in fast-moving and high-growth sectors, addressing their myriad of legal needs. But the firm doesn't just provide end-to-end legal and business counseling to its startup clients. It also facilitates introductions to key advisors and sources of capital. Perkins Coie's interactive website Startup Percolator offers access to programs, resources, and rich dynamic content designed to assist entrepreneurs on their startup journey. To learn more, go to startuppercolator.com and perkinscoie.com.

Welcome back to another episode of The Room Podcast. I'm Claudia Laurie, and this week on season 14, we're doing something a little bit different. For the first time, we've recorded live on stage at the Montgomery Summit, which happened about a month ago in front of an audience of founders, operators, and investors. Our guest is Ram Palanappian, the founder and CEO of Earnin, a company that has fundamentally rethought how people access their pay. Ram's story doesn't follow the typical fintech playbook. Before Earnin, he spent years thinking deeply about the structural inefficiencies and how people get paid and why access to your own earnings is often gated by systems that don't serve the people who need them most. In this conversation, we go deeper on the early insight that led to Earn In and why it wasn't obvious at the time, the challenges of building a product in a highly scrutinized, misunderstood category, how to navigate regulatory pressure while staying true to your mission, and of course, what it actually takes to build trust with millions of users. Recording this live brought a different kind of energy, more candid, more immediate, and a chance to explore these ideas in real time with the audience. So we're so excited to bring you into this room. As always, this is a conversation about what really happens behind the scenes, not the polished version, but the messy, complicated path of building something that matters. So with that, let's open the door.

Ram, thank you so much for joining us today in The Room.

Happy to be here.

We're delighted to be here with you. This is Claudia and mine's first time on stage at Monty, but we have been here as followers of the platform and conference for many years, and Claudia was a prior Monty TV guest herself. Hello. But this is our 14th season of The Room Podcast, and we're really thrilled to have this episode be a part of it. We'd love to start with your early journey. So could you tell us where you grew up and how that's shaped your view of the world?

I grew up mostly in India. There's probably two things from that that have influenced the way I work and the way the company's turned out. In India, my family was in business and the, sort of the contract with employees is very different than the way it is out here. The way I saw it growing up was that the company was responsible to make sure that the employees were taken care of. And so it was things like giving them free housing, education for children, making sure that the food they ate at home was healthy. Like all these things were things that the employer would do, which you don't see out here, but I was sort of used to a different type of arrangement between the employer and the employee. The other thing that I think has also influenced me is in India, the government has sort of embraced technology. You've got the modern identity system, Aadhaar, you've got the real-time payment network, UPI. And once the government embraced technology, you saw a huge movement of people out of poverty, 27% reduction in people who were in what's called extreme poverty. And it's all because of the government embracing technology. And here you actually don't see the government embracing technology as much. And we see this increasing inequality. We have a lot of complaints about inequality, but people don't want— like, the solution is obvious. India has already done it. And hopefully we can get the US to also follow the path of other countries that have reduced the amount of inequality.

Incredible. I mean, helping to solve for this and the systems that we already have and how we have these relationships between employer and employee is such an interesting approach. In this vein of early identity for you, Did you yourself always think you were going to become a founder?

No.

No. Hard stop.

Well, the way the company started was interesting. It started— I didn't set out with the intent to start a company. So, I was at another company and out there I heard that some of my employees were running into overdrafts and late fees on bills, and I was surprised because I thought we were paying everybody well. I spoke with one of them. The problem that she had was she needed money the next day. Couldn't wait till payday, which was the following Friday. And so I was like, well, we'll just pay you for the days you already worked. So I tried, couldn't figure out how to make that happen. So I said, like, I'll just pay you for the days you already worked, and then we'll settle it when the payroll system runs. I ended up doing this completely in person for a handful of my employees for about 4 years. And then I left the company, and the people I was doing this for wondered if I'd still do it for them. I didn't mind because these are people who I've now known for years. Um, so I continued doing it. In the beginning, it was over Instant Messenger. If they needed money, they would message me. So I built a very simple web form. And then when I had this web page up, then people who I did know tried to use it. And so that's how I started doing it for people who I didn't know. And today it's far more automated. Um, it's at much more scale. About 1% of the people in the U.S. who get a paycheck get all or part of their pay through Earnin today.

Incredible. Wow. What a milestone from helping, uh, local employee, I believe at RushCard at the time, right? And taking that into a real need that you saw in the market and ultimately to where we are with Earned. Orient our listeners here around where the financial fintech market was at the time. Where was Venmo? What were other platforms people were using and how did that inform what this early product looked like?

So Venmo was already there, but Venmo was and still is largely like a peer-to-peer.

Sure.

Payment tool. And what Onen is today is really a way for payroll to work in a way that is very consumer-friendly. And if you think of the payroll system, it really should have two consumers, two customers, the employer and the employee. But the way it's evolved, the payroll companies mostly think of the employer as their customer. They don't think of the employee as their customer. And you could imagine a different world where the payroll system was the employee's product. Just like you choose what browser you want to use to access a website, in this other world, employees could have chosen their payroll system. Then they would, when they get a job, they would tell the employer, here's my payroll system, you put in your account and routing number, and payroll would work the way I like it. And that payroll system would actually do things that the payroll systems today can't. So Today, the only thing that you agree with on your pay with your employer is how much you're gonna get paid. The employer decides when, but if it was your payroll system, you would decide when, you would decide where the money goes. You have so much more control over your pay. Um, and so we're actually trying to get that control to go back to the employee.

I'd love to dive a little bit under the hood of Earnin. We're sitting here in 2026, and you've said that pretty much every other digital product has moved from batch jobs to streaming, whether it's gaming, news, media, music, but paychecks have been built on systems prior to networks even existing.

Yep.

Um, tell us a little bit more about why you think payroll has been so resistant to modernization.

The paycheck is today essentially a digital product. Everyone's getting their pay electronically and it ships every 2 weeks, which is crazy for a digital product. You work every day and then you wait 2 weeks to get paid. If all the digital products work that way, you probably wouldn't use them. Like if your phone said, type your text messages every day and every 2 weeks it would send it out, you wouldn't use that phone. That's the way payroll works. It's partly because it was built for employers who don't have the need for it to work much faster. And partly because our regulations have sort of tried to have been formed around that without ever imagining that it could actually work differently. And so those are sort of two of the reasons why it is that way, but the technology exists for people to be paid more often. And it's clear that paying people more often is actually better for the employee. And so I think it's eventually we will see that paychecks work like other digital products. People will get their pay every second. They'll work like good digital products, programmable, have metadata and things like that.

Excited to peek into Earnin's roadmap, but Let's chat a little bit about the early instantiation of the Erenin product. How did you go from inside at Rushcard to the very first launch of Erenin?

So Rushcard was completely manual and I was doing it from inside the company. I had access to the systems to check if people were working and how long they were working. Then once I was outside of Rushcard, I had to get the same pieces of information with the employee's permission. So it was sort of consumer permission data, but I was able to get that data to recreate what payroll had. And so today what we're really running is a consumer-permissioned payroll system that runs in parallel to the legacy payroll system. And the first version of that is what we call Cashout. The category is called Earned Wage Access, where employees can pull their pay, um, when they want it. So it's like an on-demand pay product. And then the newer version of that is Live Pay, where the pay shows up continuously. If you think of payroll, legacy payroll being a batch product, the logical endpoint for anything batch is continuous, which is what Live Pay was, is, um, and Cashout is a stepping stone on the way to getting to continuous.

So with Live Pay, you're essentially streaming earnings second by second to the Earnin card. Under the hood, you— it means you need to know when people are working, how often they're working, what their wages are, really second by second. And then you need to distribute those funds much more systematically and frequently than with a traditional payroll system. Tell us a little bit more about the infrastructure that enables this, especially in the world of 2026 and AI.

In the legacy payroll setup, you have the payroll system and the payroll system sends the money to your bank account. It sends the money via ACH. ACH was created before the internet. It was never meant to be a high-speed data transfer mechanism, which is why payroll runs on Tuesday, you get your money on Friday. Like there's no other data transfer mechanism that takes 4 days to get confirmation that actually went through. Um, and what the payroll system does is it calculates how much money the employee should not get. Of what they've earned, figures out by law what all it should take away, the taxes, the deductions. And so basically it's trying to make sure that the employee doesn't get all the money that they earned. And it does that in a very compliant way. So that's what the payroll system does. And you have a time-dependent system generally that tells you how much money somebody earned. And so what we've done is we've recreated the time-dependent system. It works in the background in our app so we can accrue the earnings in real time. And then there is no mechanism today to drop money into an account every second. So what we do is we, um, we have a ledger, an internal ledger in which we keep track of how much money someone has earned. We use that same ledger for our Cashout product, where if somebody wants to access the pay-on-demand, we take money out of, we take earnings out of the ledger and we push money into their bank account. And then with the LivePay product, we give them a Visa card. And when they swipe the Visa card, it authorizes against the balance in our ledger. And so that's how this whole thing works real time is we have a back on time with tenant system running, and then we accrue earnings in the ledger. When you swipe the card, it authorizes against our ledger.

I have to say, it's truly an astounding example of what would it look like if we, every time we asked Claude on Tuesday for an answer and it didn't give us the answer back until Friday.

Mm-hmm.

I think we'd all be throwing our LLMs out the window.

Yeah.

Not at all.

Yeah, it's surprising that no one's questioning why payroll is so outdated still. Once you try LivePay, you don't go back to batch pay. It's like Netflix. Like once you get used to watching TV shows when you want to watch the TV show, you don't want to move back to the cable company schedule. And we're just seeing the engagement with the LivePay product is amazing. We launched it at the end of last year. We've had over a million transactions on LivePay. The app is opened 50 times a month. One of the things that's interesting with LivePay is because of the metadata that comes, that like we know that you're getting paid. We're actually able to use that to build credit scores as well. So credit scores are going up when someone starts using LivePay. It's a very transformative type of paycheck experience, which is an area that people never, like, thought of. Like, when you go to— when you get a job, you never ask the employer, "What payroll system do you use?" It's like a commodity. But now we've got a differentiated paycheck experience.

What the audience doesn't know is those are unannounced statistics, and we just got a sneak preview into big news coming out tomorrow. So no one live-tweet that. And in order to build this incredible innovation in terms of payroll and the future of the American workers, we had taken on venture, venture dollars to do so. So of course, March Capital has invested in you, a16z, Ribbit, many other collective investors that sit within the financial innovation ecosystem. But we're curious, who was the first person to say yes to investing in you and Earn It?

Rippling is something I actually relied on when I was building my startup, Pryve, and I think it speaks to a broader truth about startups. Most people don't start companies because they love running payroll or managing HR and compliance, but somewhere between hiring your first employee and raising your next round, you end up deep in HR, IT, and operations, and it can really pull you away from building. What should be simple things—onboarding, payroll, setting up tools—start to take over your life. That's what Rippling was built to solve. Rippling is a unified platform that lets startups run HR, payroll, IT, and finance in one system from day one. Rippling's startup stack replaces disconnected tools that don't sync with a fully connected platform. So if you wanna stay focused on your product and your customers, you need Rippling. Right now, venture-backed startups can get 6 months of Rippling startup stack for free. Head to rippling.com/theroom and sign up today. That's R-I-P-P-L-I-N-G.com/theroom to sign up for 6 months free today. Focus on what you're building, leave the rest to Rippling.

Rippling.com/theroom. This is Mickey Malka from Ribbit Capital. He was the very first investor and he likened it to like if you were in business or if you were like an athlete, as soon as you finished your game or as soon as like you sold something, you actually had access to the money. It was a much more fulfilling experience. And there's like a lot of like dignity and pride in the work because you could access the money immediately. And he saw that that same experience could go to everybody else.

Wow. I feel like that first yes just really means so much and can carry you through many late nights and journeys as Anya knows all too well. Absolutely.

And the flip side to that is, especially for the founders in the room, we know that the founding journey is not always linear. It's not always up and to the right. Could you share a moment where things just didn't go as planned and how you overcame that?

The biggest one for us was probably COVID. The whole company was based on people going into work and COVID, they all like stopped. One of our key things we look at is how much of earnings our people are growing. And it dropped by 60% in 3 or 4 weeks during COVID And so that was a huge change just in our volumes as well. And so the company had to adjust quite a bit and then had to adjust also to increasing amount of work from home. So there was the revenue coming down, but also the underlying nature of work changing at the same time. So that was quite a journey.

The journey has been long in terms of figuring out like how you're going to meet the ecosystem itself in this innovation. And there's been a lot of public policy moments along the way, and you've been able to meet that core stakeholder of the end employee in like incredibly generous ways. I believe that you were able to do nearly $10 million in debt forgiveness for the users of your platform. Could you walk us a little bit into the journey of making those decisions and being able to create those life-changing moments for your users?

This sort of very asymmetric way in which we could use capital, like the way we could use capital relative to the way, um, our customers could. We did this twice where we bought debt and wrote it off. So typically as an individual, if you're in collections or you have debt, you have to pay how much you owe plus accumulated interest. What we were able to do was to go to the hospital system and say, we'll buy all of your debt. Wow. You don't need to worry about any collections. And so they were able to settle it at, like, when they realized they don't have to worry about write-offs, worry about all of the amount of money they would spend trying to collect it, they would sell it to us at a big discount. And so we just bought it and then just wrote everything off. So like, that's, that was it. It was— that's incredible. Yeah. And so we could do that because you're buying it in bulk. Yeah. Whereas as an individual, they could not do it. So it was an asymmetric, um, situation out there.

You've done this and also raised debt vehicles with like Cross River, for example, to help build and scale Earn. And this is mostly a private capital conference here in the few crossover investors, not as many debt people in the room. Tell us a little bit about how you've come to make those strategic decisions about how to finance the different parts of your business and what advice you'd have to others on when to know about equity versus debt financing.

We generally use equity to build the platform. And we've used debt, um, more like working capital. And so one of the things that we do is we bridge the funds for when the employee needs the money to when the employer's account is debited. And we use debt for that. So debt is much more like working capital for us. And then we use equity, um, just for the buildout. Thank you for breaking that down.

I think sometimes, especially when a young entrepreneur is considering when to take on venture capital, they think about like the efficiency gains that might come from debt. And of course, private credit has become a really interesting way in which people are fueling their companies today. And we'll see how that story does end. We couldn't get you off stage without talking a little bit about AI. How has this step function change in how we build and ship software changed how you inside of EarnIt are building and shipping your core product?

We're heavy users of all of the AI tools for code generation. I think the bar keeps raising every 3 months. Someone earlier today said that you have to do a hard pivot every 6 months because of how quickly it's changing. We're in the middle of this paradigm shift with AI. We, I don't think we all know exactly where it ends. So we're all trying to navigate this. What is clear is that things that we previously believed to be true may no longer be true in the future world. We're trying to figure out what are those beliefs that we had that are not going to be true in the future that are probably holding us back if we still stick with them. Right, exactly.

And I think that's something that we're thinking about every day as we talk to entrepreneurs on our podcast is like, well, they raised for this one idea and this one company and this product and then, oh my gosh, like this thing is changing under their feet. How are we getting it? You're, you're speaking every day to these buyers who are the employers. And then of course, I'm keeping a close eye on how your end users are using your product. Just taking a step out of even just the earn product space. How do you think consumer fintech is changing?

I don't know if AI has yet got into the core of consumer fintech. I think people might consult AI to get ideas on what to do, or like how to plan a holiday or where to shop. Writing software, software engineering is maybe where the AI tools are most developed. And there was ChatGPT version of Stack Overflow where programmers would first go and ask questions. And then there was a Copilot version where it would sort of help you with your code. And eventually now it's got to agentic workflows. Consumer finance is maybe getting close to Copilot, but it's not yet at Copilot. So it's still a little bit behind where the code generation tools are. And I think particularly for our customer base, I think they're less likely to give up control to an agent very quickly. I think you'll find the different customer base starts using agents to manage their money before our customer base. Our customer base doesn't really sign up for automatic bill payment. They don't have credit cards, but if they had credit cards, they're not getting automatic bill payment because they're afraid that the timing won't work out. They're very hands-on in how they manage money. So I think we'll see the agentic commerce probably come to a different group before it comes to our customer base first.

That makes sense. I'm curious just to maybe go one layer deeper on all of the learnings you've had of this core customer base. How is it helping employers make better decisions about how they support their employees? And how have you seen just that employee-employer relationship and stakeholder evolve as you've stepped in to help create a more employee-first payroll experience.

Employees are actually better off when they can access their wages, paying less in overdraft fees, paying less in late fees. They're showing up at work much more. The reason this happens is our customers, they can't lock up $50 of gas in the gas tank. They're filling gas $10 at a time. If something unexpected happens, they have to spend money on something else. They're not going to overdraft to fill gas and go into work. They used to just miss work. Work. Now with Onnion, they would download the previous day's earnings and they go into work. We shared some of our customer data with the research group out of the University of Oregon. We had access to data on 1.5 million Onnion customers and found that income went up 11.5%. That's about $335 per month. Wow. And another research group out of UCLA on a different provider found very similar results. When employees can access their pay when they need it, their incomes go up. In fact, the incomes go up, have gone up twice as much as inflation. So it's clearly good for consumers to be able to access their wages. Employers like it as well because the employees coming into work better, attendance is much better. I think there's also like a branding piece to it, which is like, it's not just how much you pay, it's how you pay also matters. And when the employers give access to pay in a way that the employees like it, the employees actually value that job much more. So today, over 10,000 companies use Odin Payroll to do all their payroll work for their employees.

Well, it's incredible to understand a bit more about how it is being reshaped through your product and through this innovation. So congratulations. And you spoke in January to the House Financial Services Committee on this exact topic. So could you give the room a little bit of an inside look as ultimately people living in this country, how we can think about how the government is shifting their thinking on earned wage access and payroll systems.

In the beginning, to me, it was like, it felt like this should be a no-brainer. Like, why would people not want to have— not want employees to have access to money that they've already earned? But what I realized is that anytime there is something new, there's always people who are afraid of what is new. It's similar to like when ATMs came out. Banks advertised ATMs as you could access your money 24 hours a day. And there were a whole bunch of consumer advocates who were against ATMs. So they said like, what is the use case for money at 3 AM? It's either gambling, prostitution, or al— or alcohol. And so they fought ATMs. 70 years later today, we know that ATMs are used for other reasons as well. But they were so afraid then. Yeah. And there's people who are afraid again today, but what is clearer from academic research, like from really rigorous research, is employees make more money. And employees have recognized that, they're paying their bills on time, they're much less stressed, that they're actually adopting it as well. So I think it's like the consumer adoption is just accelerating. There's a lot of very rigorous study that is very compelling for people. And what we're now trying to do is help the law catch up to what is good for people.

Well, we spent some time chatting about the founding journey of Urnin and what we have on deck next. And as we come up on time for today's session, we'd love to ask our hero question of the Room Podcast. And that question is, who is a woman that has had a profound impact on you and your career?

I start with one of our early employees, Katie. She was, I think, very influential on the product. She, um, had a very good intuitive understanding of how our customer base lives and how the product would land with them. So we actually call it the product conscience. Like she had the right to actually block anything from going out the product. So everybody would check in with her if something was okay to go out. And so she was very influential in the beginning to make sure that we build stuff that was always like customer first. I think that's something that's continued with the company ever since. Incredible.

Well, Ram, thank you so much for joining us. In the room today.

Thank you. Thank you so much for joining us at The Room Podcast. If you want more from The Room every week, subscribe to our newsletter at theroompodcast.com/newsletter.

We'll be back next week with a new episode and inspirational guest.

Tuesday, 10 AM Eastern, 7 AM Pacific. See you in the room.

We used Rippling at my startup, Pryve, and one thing that really stood out was how much it simplified workflows that are usually incredibly manual. With other tools, onboarding a new hire, setting up payroll, provisioning apps, and shipping a laptop can take weeks and completely disrupt your flow when you need it most. With Rippling, those workflows happen automatically in one place. That's a big deal, especially early on when every hour matters. Over 15,000 startups, including Cursor, Clay, and Sierra, trust Rippling to scale fast without adding additional ops and HR headcount so founders can keep building. So if you or your startup want to move as quickly as you can and focus on what really matters, like your product and your customers, you need Rippling. Right now, venture-backed startups can get 6 months of Rippling startup stack for free. Head to rippling.com/theroom and sign up today. That's R-I-P-P-L-I-N-G.com/T-H-E-R-O-O-M to sign up for 6 months free today. Focus on what you're building. Leave the rest to Rippling. rippling.com/theroom.

Perkins Coie supports the most innovative entrepreneurs and investors in fast-moving and high-growth sectors, addressing their myriad of legal needs. But the firm doesn't just provide end-to-end legal and business counseling to its startup clients. It also facilitates introductions to key advisors and sources of capital. Perkins Coie's interactive website, Startup Percolator. Offers access to programs, resources, and rich dynamic content designed to assist entrepreneurs on their startup journey. To learn more, go to startuppercolator.com and perkinscouee.com.