Earned Wage Access providers like DailyPay front paychecks using debt, while new payment rails like FedNow and Real-Time Payments let banks transfer money instantly without borrowing. The first accelerates payouts by taking on risk; the second speeds settlement through agreed-upon rules that replace the traditional 2-3 day wait.
There's a lot of things that's happening in payments right now. The first is the introduction of things like Earned Wage Access. They're trying to get the paycheck moved to that space faster, and they do it by using debt, either Visa or a third-party provider like DailyPay will say, I'm going to put up $1 million so that I can get the payment out faster. So even if I haven't, the payroll provider hasn't collected from the employer, that money will be there and I will take the risk. That's a faster payment solution only on the payout side, the direct deposit. In addition to that, there are a lot of new payment solutions that move the money faster without debt. And that's when you have things like same-day ACH, like real-time payments, like FedNow, like wires. And that is an account-to-account payment that is basically just the banks agreeing with each other to say, hey, instead of settling this in 2 or 3 days, let's do it right away. And it's It's really just a rulebook that they all agree to and say, "Yep, we trust each other."
