Gen Z wants to get paid every day
According to a recent report from the Center for Generational Kinetics (CGK). As the first generation to come of age in an age where daily paychecks are possible, according to CGK, it makes sense that Gen Z would want immediate access to their paychecks.
On-demand pay is most often marketed to employees who find themselves living paycheck to paycheck under the standard payday every two weeks. Often referred to as Access to Earned Wages, it helps workers access funds daily to repay loans and bills on time and avoid late payments. overdraft feesand high interest rates on payday loans.
This could be useful for Gen Z, who are largely subject to base salaries and have been hardest hit by pandemic-related economic woes. CGK finds that they were the first generation to lose their jobs, take a pay cut, or see a reduction in available working hours per week. While they have largely recovered since the pandemic first hit, the experience has made them eager to avoid going into debt or avoid missing payments.
The daily payment is not much to ask in the minds of young workers, who are used to having things close at hand.
The pandemic has accelerated the rise of an “on-demand world”, said Jeanniey Walden, director of innovation and marketing at on-demand payment software company DailyPay. Fortune: Food delivery, car rides, lodging, and even buying and selling cars can all be done with the press of a button. Salary, she says, is the next natural frontier.
“For many of us, this is a welcome development, but for Gen Z, [getting things on-demand] that’s how they grew up,” she adds. “It’s not just what they know, it’s what they expect.”
DailyPay’s user data reflects Gen Z’s growing interest in on-demand payment for more than five years, Walden said. If people can send money to friends instantly via Cash App or Venmo, she explains, why can’t employers pay workers in real time after each shift?
But a daily salary has a catch. Unless employers cap on-demand pay at a low amount, employees may need early and consistent access to their pay to make up the difference in their reduced paychecks. A survey of 1,000 people by GOBankingTariffs found that 40% of Americans who get paid every day live paycheck to paycheck, and 34% have no savings.
“Workers who receive their salary daily tend to spend it immediately upon receipt and live day to day,” said Salvador Gonzalez, an auditor and accountant. told yahoo. “People who earn a daily wage are less likely [than workers paid biweekly] having bank accounts, saving or building up assets.
This does not necessarily have to be the case for everyone. While people of all ages can benefit from access to earned wages, young people have a better understanding of how it can help them manage their cash flow and expenses, Walden says. She added that Gen Z users check their DailyPay balance, an up-to-the-minute calculation of their earnings, much more frequently than their checking account balance.
“For them, knowledge is power,” she says. “It gives them a clear idea of their purchasing power. It’s good for everyone.
This story was originally featured on Fortune.com