The traditional pay cycle is entrenched across American culture and business, but increasingly, it doesn’t work for everyday people.
Biweekly or semi-monthly pay periods are a common practice for many companies. A majority of the American workforce, including both hourly and salaried workers, receive their paychecks every two weeks (43%) or on select dates twice a month (20%), while 10 percent get paid monthly. For employers, this frequency allows for reliable payroll processing. But for employees, it’s not so beneficial—and all too often, it’s holding up their pay.
More than 65% of Americans live paycheck to paycheck, and 50% don’t have the funds to cover a $400 emergency. For these workers and many others, even waiting a few days can be challenging when an unforeseen event or unexpected opportunity upends their budget: an unexpected vet bill, a much needed car repair, or concert tickets that went on sale. Beyond bills and emergencies, impromptu purchases like class field trips, or a night out with friends can simply feel out of reach when you’re stuck between paydays.
There has to be a better way. As demand has spread, proving that workers want and deserve early access to their pay, Chime is now introducing MyPay™, an offering that allows qualifying members to access up to $5001 of their pay any time before payday for free within 24 hours or instantly for $2.
The rise of early pay access
Despite the dominance of long pay periods, the movement for early access to pay has been brewing for years. Over the past decade, major employers like Amazon, McDonald’s, Walmart, and Target have piloted versions of early or on-demand pay for their employees. In most cases, employees gained the ability to request earned wages to be deposited directly into their checking account or to a prepaid or debit card. In 2020, American workers accessed $9.5 billion in early wages, up nearly threefold from $3.2 billion in 2018.
Enter MyPay™ by Chime. With millions of members who use Chime as their primary account including direct deposit, the leading mobile banking app knew they could help their members get more freedom and control of their money to tackle unexpected expenses or take advantage of an opportunity between paydays.
“Members tell us they want more control over their pay, especially when the timing of their paycheck doesn’t line up with the things they want or need in life. MyPay is really how it should work. As their primary account partner, we know our members’ direct deposit history, when it’s arriving and an approximation of how much. We don’t believe you should have to wait until payday to get paid,” said Madhu Muthukumar, Chief Product Officer at Chime. “Like everything at Chime, MyPay delivers on being simple to use, transparent, and works together as a part of the powerful suite of tools we offer members to help them unlock financial progress in their lives.”
Seamless integration with real-world budgets
People vastly prefer greater control over when they get paid, but employer adoption has lagged behind consumer interest. More than 20% of American employees want early access to their pay, and 56% of people with earned wage access do use it, but only 12% of employers offer such programs.
With tools like MyPay, people don’t have to rely on their employer’s pay schedule to get some of their pay early. Whether it be for emergencies, impromptu purchases, or off-cycle bills, access to your pay helps to alleviate financial constraints, giving consumers more control over their cash flow and budget.
MyPay also offers members flexibility to access what they need from their advance in each pay cycle. That means that if they’re eligible for $380 in a MyPay advance but only need $200, they can get access to $200 first, and still have $180 left for future advances between pay periods.
Building the future of financial freedom
As a leader in fintech innovation, Chime created MyPay to complement its larger suite of free or low-cost digital banking tools. When they decide to build a new offering like MyPay, Muthukumar explained, they’re thoughtful about considering how it will fit within the digital banking platform that members rely on every day. SpotMe™, Chime’s fee-free overdraft service2, helped revolutionize the banking industry’s approach to overdraft. MyPay is poised to be a similar catalyst for change.
“Chime’s approach to banking is holistic,” he said. “Our members don’t want to jump from app to app. And we want our members to easily benefit from all of Chime’s low-cost offerings, including MyPay, without needing to download something new.”
That same holistic principle extends to the MyPay user experience as the entire process can be done directly in the Chime app – members can see if they’re eligible to enroll in MyPay, and to make it even easier, repayment is automatically deducted from their next direct deposit3. This streamlined approach makes it convenient for members to budget flexibly from month to month, without feeling constrained by their pay schedule.
While other early payday providers request fees in the form of tips, or enrollment in a monthly subscription, Chime offers MyPay as a standard feature for members who make qualifying direct deposits. It’s in keeping with the fintech’s commitment to low-cost digital basic banking services. In addition to MyPay, Chime members have access to Get Paid Early4, a service that deposits wages up to two days earlier, and SpotMe, fee-free overdraft coverage up to $200. Together, this suite of products gives Chime members the control they need to plan their finances—for whatever else life throws their way.
Want up to $500 of your pay before your next payday? Learn more about Chime and MyPay at chime.com/mypay.
Chime is a financial technology company, not a bank. Banking services and MyPay provided by The Bancorp Bank, N.A. or Stride Bank, N.A.
1 Eligibility requirements apply, including receipt of qualifying direct deposits as set forth in the MyPay Agreement. Not all
users will qualify. MyPay is available only in certain states. MyPay credit limits range from $20-$500. See Bancorp MyPay Agreement or Stride MyPay Agreement for details.
2 SpotMe™ eligibility requirements and overdraft limits apply.
3 With authorization, outstanding MyPay balances will be repaid from direct deposits to your Chime Checking Account from Eligible Sources. See Bancorp MyPay Agreement or Stride MyPay Agreement for details
4 Early access to direct deposit funds depends on payer.
