Is EWA Facing a “Y-2-Pay” Moment? with Special Guest Jason Lee

[00:00:09] Welcome everyone to another episode of HR Amperell 2.0. I'm Pete Tiliakis and as always I'm joined by the legendary Julie Fernandez. Welcome Julie.

[00:00:17] Thanks Pete and hopefully if we got our video recording right folks can tell that we're also joined by a regular friend to the podcast network, Jason.

[00:00:26] Yes, yes, yes, the fintech visionary, on-demand pay pioneer, HR Amperell 2.0 alumni, Mr. Jason Lee. Welcome, welcome to the show.

[00:00:35] I am thrilled to be amongst these legends right here. I mean this is, if I'm amongst all these legends, do I get to somehow elevate up to be a legend?

[00:00:46] Oh it all rubs off, that's when we hang out to be.

[00:00:49] You're a legend in your own world man and we appreciate your insights. Look, I want to talk about the CFPB. I know we had a little chat about it, I think we just sort of goofed around to be honest a little bit, but I want to really dig into this with you because I think there's some real ramifications

[00:01:05] here for the market, for employers and I'd love to dig into that. But first I want to talk about Salt Labs and its new home at Chime. We've covered this on the show, congratulations.

[00:01:14] Came out of nowhere, honestly, I didn't think it would be this soon, but tell me what's going on over there man. What's the new home and what are you guys doing together?

[00:01:21] Sure, well first of all let me say that I was on this show, I think about almost a year ago, I think announcing Salt Labs.

[00:01:31] And so, boy, the way the world moves. First of all, I would say that we were not looking obviously to do a transaction or a sale, but there was something really special that we had unlocked with our early customers.

[00:01:44] And what that was, for those of your listeners who may not have heard of Salt Labs, the problem that we were really trying to solve was, hey, what is the thing that employees want most out of work?

[00:01:58] Sometimes in HR technology, we call this, well, they want rewards or recognition. And I always kind of came at this problem and said, well, is that really what they want?

[00:02:08] Or do they want something that's actually rewarding and recognizing? And when we actually did the research, what we figured out was that what people want out of work is very, very simple.

[00:02:20] They want to build for the future. That's it. They want to come to work today to build for the future. That's really all people want.

[00:02:28] And in finance speak, we call that savings. You work today, you save a little bit, and you get to spend it in the future.

[00:02:37] Now, as anyone who works with more lower income hourly worker types will tell you, gosh, it is very, very difficult to get those types of folks to wind up saving.

[00:02:50] It's really hard because the savings motion is a very unnatural motion. It's very unnatural. How can you get someone to split what they already perceive to be too small in the beginning?

[00:03:06] It's just really hard to get folks to do that. Long story short, we used a bunch of technology. We changed the motion completely.

[00:03:14] Instead of us saying, hey, you should really save some money and put away 5% of your paycheck, which no one will ever do in this demographic.

[00:03:23] They haven't done it for the last 100 years. What we said was, wait a minute, you like earning, don't you?

[00:03:30] Well, what if you just earn this thing called salt alongside the work that you did?

[00:03:35] By the way, that salt is non-fungible. You can't go and spend that at 7-Eleven or at Dunkin' Donuts or whatever, but you can save up a bunch of salt to go exchange into something that you would have wanted to save for on a medium to long-term basis anyway.

[00:03:55] Maybe it's a family trip. Maybe it's an actual savings product like a treasury bill or your very first 529 contribution.

[00:04:04] Anyways, what we found out was that when you compared what people save today out of their paycheck, which is negative 2%, and you compare that to what we were able to achieve, which is 59% savings rate for salt, folks started to take notice.

[00:04:22] The first people who took notice were employers. Employers came to us and said, hey, Jason, I'm seeing a profound change in my workforce.

[00:04:31] People are actually a lot more stable. They feel like they're getting something out of work.

[00:04:36] That was really exciting for us to hear. Then others in the marketplace heard the same thing.

[00:04:40] They heard, we think these guys have cracked the code on savings.

[00:04:45] Well, one of those folks who did hear about it was Chime Financial.

[00:04:49] Chime, we are the largest digital banking offering in the country.

[00:04:53] Interesting.

[00:04:54] We're a top 10 app in the app store, 7 to 10 million users.

[00:04:58] I mean, this thing is a massive, massive machine.

[00:05:02] But lo and behold, they also serve paycheck to paycheck, lower income, what we like to call at Chime, everyday Americans.

[00:05:09] Yeah.

[00:05:10] And so they had heard, hey, we think you cracked the code on savings.

[00:05:14] Why don't we partner together?

[00:05:15] So that's what we did.

[00:05:17] I was thrilled to get the call.

[00:05:19] They're a great team to work with.

[00:05:21] And our vision at Chime for the future is really, how can we start driving holistic financial wellness through great technology embedded in the bank account structure?

[00:05:34] Because what's good for employers is good for employees.

[00:05:38] By the way, it's good for us too.

[00:05:39] And so that's really the vision behind what it is that we're trying to achieve at Chime now.

[00:05:43] Yeah.

[00:05:44] I love it.

[00:05:44] I love it.

[00:05:45] So you guys are all, you're really, you're really fitting into their broader solution then.

[00:05:48] And there's a, there's a good bit of an HR offering, I think, right?

[00:05:52] Employer side, right?

[00:05:52] So what I'm going to be doing is, you know, Chime right now is fully direct to consumer.

[00:05:57] Okay.

[00:05:57] They acquire their users on the internet, direct mail.

[00:06:01] We sponsor the Dallas Mavericks, for God's sake.

[00:06:03] Like we do a lot of things to make our brand very known across America.

[00:06:10] And by the way, when you have seven to 10 million people using your product, there's a lot of people who know who we are.

[00:06:17] Now, how can we leverage that to benefit and help employers?

[00:06:23] And what we will be doing, what I'm doing is I'm leading a new division at Chime, which is called Chime Enterprise.

[00:06:30] And what we are doing is really doing HR technology.

[00:06:32] We are going out and leveraging best in class technology to kind of go out and say, hey, look, employers, we do a lot of great things at Chime.

[00:06:42] One of those things that we do really well is it's our ethos to have minimal or low or no fees for everything that we do.

[00:06:52] Our business model is we partner with stores and merchants and e-commerce.

[00:06:57] And that's really what our business model is.

[00:07:00] So we're able to offer you, the employer, and subsequently your employees, a bunch of cool stuff at no cost.

[00:07:07] Be it on-demand pay even, be it SALT, be it maybe financial wellness or education.

[00:07:15] We just launched a program, sorry, as part of what we do.

[00:07:19] This weekend, I was on the phone with a bunch of folks who are in the path, unfortunately, of Hurricane Debbie, which is a big storm down in the southeast.

[00:07:28] Well, at Chime, we offer hurricane relief.

[00:07:30] Oh, interesting.

[00:07:31] I didn't know that.

[00:07:37] To world-class employers, we want to bring something that says, hey, look, we have 48 products and these are all for you.

[00:07:44] And, you know, we know that HR departments today are struggling with too many point solutions.

[00:07:49] They're all being asked to do more with less.

[00:07:52] All of that is the case.

[00:07:53] We say, hey, look, we've got 48 things.

[00:07:55] By the way, 22% of your employees already bank with us.

[00:07:58] Yes, that's what I was going to say.

[00:07:59] This feels very bottom up, right?

[00:08:01] You've got the employee already using your solution.

[00:08:04] But as a customer, as a consumer, now saying, hey, oh, I can bring this to work and leverage it in my workplace.

[00:08:10] I think that's fantastic.

[00:08:11] And as you know, this financial wellness conundrum, it's continuing to swirl, right?

[00:08:16] Employers are throwing all they can at it.

[00:08:17] So I think a holistic approach like this is great.

[00:08:20] I feel like bottom up is like Jason's trademark name or something.

[00:08:24] It's Jason Bottom-Up Lee.

[00:08:26] Yeah, it's like that pool, you know, folks.

[00:08:28] I think that's what we need.

[00:08:30] And I know we're going to get into earn wage access.

[00:08:31] But I think that's what we need more of is employees saying, hey, how come you don't have earned wage access?

[00:08:36] How come you don't have earned wage access?

[00:08:37] Because I think it's not often that the employers are jumping out and saying, hey, we need this unless there's some sort of pull on them.

[00:08:45] And I think this is a great way.

[00:08:47] It makes total sense.

[00:08:48] And I think it's a perfect fit for you guys.

[00:08:49] So I'm excited to see where you go.

[00:08:51] Congrats.

[00:08:52] We're watching.

[00:08:52] Yes.

[00:08:53] Well, we appreciate it.

[00:08:54] And to Julie's point, I think the whole bottoms up thing is, look, I spend all day long with HR departments.

[00:09:00] They're busy.

[00:09:02] They're really busy.

[00:09:03] And they are understaffed, honestly.

[00:09:06] And we don't see a world where you can roll out a new program, top down, call the managers, check in.

[00:09:13] What we'd rather do is say, hey, folks already use this product.

[00:09:17] They're already.

[00:09:18] Check out the big billboard in Times Square.

[00:09:21] We're a known brand.

[00:09:22] Watch an NBA game.

[00:09:24] You'll see us.

[00:09:25] We are a known brand.

[00:09:26] And now we are going to bring the hundreds upon hundreds of millions of dollars that we've invested in building that brand.

[00:09:34] And we want to bring that to your nostrils.

[00:09:36] And by the way, we're already on your employees' phones, right?

[00:09:39] We're already engaged.

[00:09:40] There's a trust already.

[00:09:43] Get that benefit.

[00:09:43] Yeah, I love it.

[00:09:44] I love it.

[00:09:45] Well, look, keep us posted, Jace.

[00:09:46] We want to stay abreast of what's going on there.

[00:09:49] And I'm a big fan, so I'll be right on top of it.

[00:09:53] But what we brought you here for was to talk the CFPB, right?

[00:09:57] The Consumer Financial Protection Bureau.

[00:09:59] I think it is.

[00:10:00] Recent decision on, well, not decision, but statement, I guess, right?

[00:10:04] They made a statement on a position around earned wage access being loans.

[00:10:09] Man, that's got a lot.

[00:10:11] There's a lot there we can talk about.

[00:10:12] But let's just maybe you could explain it for those of us in the easiest terms.

[00:10:17] Like what has happened?

[00:10:19] Is it law?

[00:10:19] I don't think it is, right?

[00:10:20] We're a little bit ways away from that.

[00:10:22] But like what exactly are we talking here?

[00:10:24] Right.

[00:10:24] So maybe I can break it down in the following way, which is number one, what actually did

[00:10:31] they say?

[00:10:32] Hey, this is William Tenka, Work to Fun.

[00:10:35] Hey, listen, I'd like to talk to you a little bit about Inside the C-Suite, the podcast.

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[00:10:49] Give it a listen.

[00:10:50] Subscribe wherever you get your podcasts.

[00:10:52] Number two, how important is it?

[00:10:55] And number three, what are the implications for and most importantly for employers?

[00:11:00] And that's kind of the way that I would think about this dialogue.

[00:11:02] So first, what did they actually say?

[00:11:04] So as you said, Pete, it was the Consumer Finance Protection Bureau.

[00:11:08] That's a really important organization.

[00:11:11] And that's the technical way of saying it.

[00:11:13] They're really smart.

[00:11:15] They're very important.

[00:11:16] And while there's a lot of like technicalities around, do they have authority?

[00:11:22] Do they not?

[00:11:23] And let me just say, there are a bunch of really smart people in Washington.

[00:11:26] They have a lot of influence.

[00:11:28] And oftentimes, because in the United States, we live in a federated system, obviously, oftentimes

[00:11:36] the states will look to the CFPB for help and guidance.

[00:11:42] And hey, we're trying to figure out this issue.

[00:11:44] But what do the smart people think?

[00:11:46] What do folks in the federal arena think about this?

[00:11:50] So number one, really smart people.

[00:11:52] What did they wind up saying?

[00:11:54] What they wound up saying was, hey, when an employee takes a payment that is in connection

[00:12:01] with earned wage access, you know what?

[00:12:03] We in the CFPB think that's a loan.

[00:12:06] And the implication of that is, well, if it's a loan, well, then, well, gosh golly, an employee

[00:12:14] has to be able to pay a price for that payment that is capped at whatever the limit is on

[00:12:22] the loan rate.

[00:12:23] But so for example, most states, most governments, I'm sorry, most states rather, and the federal

[00:12:29] government has a cap of like 36% interest on a consumer loan.

[00:12:34] You probably have seen that number.

[00:12:35] To put that into plain English based on kind of the way these on-demand pay payments work,

[00:12:40] in effect, what they're saying is the max price that someone should be paying on this

[00:12:44] is about somewhere between 50 and 90 cents a payment.

[00:12:47] But that's kind of what they're saying.

[00:12:49] When you do all the arithmetic and you cut through it all, that's effectively what they're saying.

[00:12:54] And they're saying that because they're saying, look, there's a loan.

[00:12:57] And we already have rules that say what the max price is on a loan.

[00:13:02] The reason why they're saying it's a loan, and I'm not going to say whether I agree or disagree

[00:13:06] with them, because that's irrelevant to this discussion, because I don't work in Washington.

[00:13:11] I'm not as smart as they are.

[00:13:12] But what they're basically saying is, hey, look, we understand that this is in connection

[00:13:18] with wages.

[00:13:19] But at its core, even if when you give something to someone, and then there is a repayment of

[00:13:27] that thing, well, that then fits you into a loan characterization.

[00:13:32] Yeah, that's fair.

[00:13:33] Not unreasonable.

[00:13:34] And they have an asterisk.

[00:13:36] And that asterisk is, if the employee does not pay any fee, well, then a lot of this goes

[00:13:42] away.

[00:13:43] Like a lot of this characterization, a lot of the obligations.

[00:13:46] And really, they are really making a very bold statement, which is, hey, we do care a

[00:13:52] lot about what consumers are paying.

[00:13:54] So that's sort of step one, which is what it is that they've said.

[00:13:57] Step two is, will it become law?

[00:13:59] And on this one, I can be much shorter.

[00:14:02] I don't know.

[00:14:03] And I don't think it matters.

[00:14:04] Meaning, here's the thing.

[00:14:06] The legislative process in the United States is, in fact, very complicated.

[00:14:10] We've got an election this year.

[00:14:12] There's all sorts of rulemaking authority and all these.

[00:14:16] Let me get to the third point, which is what's the implication?

[00:14:19] Because it doesn't matter whether something is a law or not a law.

[00:14:24] I can just tell you firsthand, the best employers are already saying, we don't care if it's a

[00:14:29] law.

[00:14:30] We're not going to wait for that.

[00:14:31] We're just going to move our program to, in fact, be zero fee.

[00:14:36] Because we don't want to wait for someone else to surprise us.

[00:14:40] Think about this.

[00:14:42] Every employer who offers on-demand pay was told for years, don't worry, it's not a loan.

[00:14:49] And they woke up on July 16th to an email that said, surprise, it's a loan.

[00:14:57] And world-class employers do not like surprises.

[00:15:02] And part of the reason why, Pete and Julie, that's the case is because, look, lo and behold,

[00:15:07] 50%, 30% of an average employee base is using this product.

[00:15:13] Heavens forbid that companies are told unexpectedly, sorry, your current vendor is not in compliance.

[00:15:21] And so what companies are now doing is they're saying, wait a minute, I got to get ahead of this thing.

[00:15:26] What does it look like if this is zero fee?

[00:15:29] Who's got zero fee products?

[00:15:30] Number one.

[00:15:31] Number two, by the way, you better not come to me and tell me I have to pay for this.

[00:15:37] Meaning, like, I'm already budget constrained.

[00:15:40] I don't want to get some letter from a vendor saying, well, no, you have to pay for this now.

[00:15:46] And the third is, you better not tell me that if I cancel the contract, I have to pay a cancellation fee.

[00:15:52] These are the dialogues that I'm hearing right now at the HR operator level, which is, we got to get ahead of this.

[00:15:58] Because if the vendor community is going to start to pass on costs to us, either through program fees, cancellation fees, like that's a non-starter.

[00:16:08] And we need to be prepared for a zero fee environment.

[00:16:11] So, Pete, the dialogue is not, is actually transitioned almost overnight from not if this is going to happen, but rather it's going to happen.

[00:16:22] So, how do I get prepared for the fact that the government, smart people, and by the way, while they won't tell you this, a bunch of employers were also part of this saying, we don't think it's right for employees to pay fees.

[00:16:35] And they were actually in those offices saying that.

[00:16:39] And so, that's kind of what we think is going to happen.

[00:16:42] There is good news though.

[00:16:43] So, there is very good news, which is a change like this is so significant that it will create opportunities for innovation.

[00:16:54] Like Plato said, you know, our needs are our greatest creator.

[00:16:58] And like there is no better need or rather invention rather, no better mother invention than need and necessity.

[00:17:06] And so, I'm convinced that really smart people in the earned wage access space will come up with alternative ways to provide a product to employees at no cost while still providing highly performant, highly durable, awesome, exciting, cool stuff to employees and employers, but just change the pricing model.

[00:17:30] And it's, you know, and that's really where innovation comes into play.

[00:17:32] That feels like a major, that's a major thing now, right?

[00:17:35] It's a major lever because already across the industry of earned wage access providers, there were a number of different ways that, you know, mechanics really around how it was funded or what was employee fees and what wasn't employee fees.

[00:17:51] And that was some of the differentiator.

[00:17:53] And, you know, so I don't know if you're seeing any, you know, like what short-term mechanism is there other than the employer pays?

[00:18:01] It covers those costs and makes the employee awful.

[00:18:05] Hey, it's Bob Pulver, host Q podcast.

[00:18:08] Human-centric AI, AI-driven transformation, hiring for skills and potential, dynamic workforce ecosystems, responsible innovation.

[00:18:17] These are some of the themes my expert guests and I chat about, and we certainly geek out on the details.

[00:18:22] Nothing too technical.

[00:18:23] I hope you check it out.

[00:18:25] I want to take a break real quick just to let you know about a new show we've just added to the network.

[00:18:31] Up Next at Work, hosted by Gene and Kate Akil of the Devin Group.

[00:18:38] Fantastic show.

[00:18:39] If you're looking for something that pushes the norm, pushes the boundaries, has some really spirited conversations, Google Up Next at Work, Gene and Kate Akil from the Devin Group.

[00:18:54] Yeah.

[00:18:55] Yes.

[00:18:55] Go ahead, Jason.

[00:18:56] I want to add something to that.

[00:18:58] It's a little bit like, really, Julie, this is, you know, far be it for me to say that this is the only time in the world of technology that a product has become commoditized, either because of competition or government, where people had to innovate.

[00:19:14] I mean, email itself.

[00:19:16] Remember we used to pay for email?

[00:19:18] Or checking.

[00:19:20] Do you remember checking?

[00:19:21] The very first checking account was created in 1891.

[00:19:26] And it took about 101 years until 1981, 1982 rather, for the very first checking account to be free.

[00:19:34] So just think about that.

[00:19:36] It took 100 years for the checking account to become free.

[00:19:40] It took seven years.

[00:19:42] It's a great point.

[00:19:43] For earned wage access, which is just a form of checking to become free.

[00:19:47] And that's what I mean by the innovation curve.

[00:19:50] It just moves quicker.

[00:19:51] And I suspect that products will come out where it's saying, you know what, we don't need to make money on these transfer fees or whatnot.

[00:19:58] You know, we're making money through different partnerships or different merchant deals or, hey, send it to our bank account or whatever it might be.

[00:20:06] And I think my prediction is this whole earned wage access space, it will start to be subsumed by the banks themselves.

[00:20:15] Like, I think that's probably where this is headed.

[00:20:18] Because at the end of the day, earned wage access is just money.

[00:20:21] And we have a very clear owner of money when it comes to consumer relationships.

[00:20:28] And that's the bank.

[00:20:29] By the way, I should just make the plug or make the observation.

[00:20:32] That's kind of what we're doing.

[00:20:34] Like, honestly, that's kind of what we're up to, which is, you know, we're a banking application.

[00:20:38] We control people's money.

[00:20:40] And gosh golly, doesn't it make sense that your earned wage access should be part of that?

[00:20:44] Of course it should be.

[00:20:46] This is your money.

[00:20:47] And so I think you will start to see a migration towards different players in the ecosystem starting to pick up the innovation slack on changes like this.

[00:20:59] Yeah, you know, Jason, I don't think it's unreasonable for people to expect, to your point, that we would have eventually gotten here, right?

[00:21:06] I mean, direct deposit's free.

[00:21:08] Why am I paying for, you know?

[00:21:09] Yeah, and I somewhat agree.

[00:21:12] You know, you're saying, hey, look, we don't want to charge people for delivering their pay, and you shouldn't.

[00:21:18] But at the same time, I guess if someone is saying, hey, I want to use this tool to help me do it faster, it made sense, right, for there to be an incremental fee.

[00:21:26] And interestingly, I don't know if you have any data on this.

[00:21:29] I don't have it with me.

[00:21:30] But I always kind of noticed that there were, you know, obviously there are models that are in the market that say, you know, employees pay some fee.

[00:21:37] And there are some who've gone about it where employers pay fees.

[00:21:40] And those solutions haven't grown nearly as fast as the ones where employers are not paying it.

[00:21:45] So, you know what I mean?

[00:21:46] I feel like this is just sort of working itself out in some ways in the market.

[00:21:50] But what do you think happens to the competition here?

[00:21:53] Do you think it's consolidation by banks or by chimes or other, you know, platforms?

[00:21:58] Or do you think it's more of a, you know, who's going to be left standing, I guess, is what we're saying.

[00:22:02] The good news is I know all the players in the marketplace and they're all really clever, smart people.

[00:22:08] Very clever.

[00:22:09] And so I have the utmost confidence that folks will be able to operate in this environment because the reality is, Pete, you're going to have to.

[00:22:17] Because the standard has been set.

[00:22:19] Let me just stress again.

[00:22:21] Nobody cares who's in that White House.

[00:22:23] Nobody cares about the technicalities of legislative process, Chevron deference, all these different terminology, things that are being thrown around.

[00:22:31] It's all about moral high ground standard.

[00:22:34] Standard's been set.

[00:22:35] Really smart people in Washington have said, we don't think people should pay for their pay.

[00:22:39] And you know what?

[00:22:39] That ain't unreasonable.

[00:22:40] Yeah.

[00:22:41] It ain't unreasonable.

[00:22:42] When I started this whole industry out of my base, sorry, my dog and I started this industry out of my basement.

[00:22:48] I love the old school throwback logo on the wall, by the way.

[00:22:50] It's a mess.

[00:22:51] Yes.

[00:22:51] Oh, yes.

[00:22:51] That's yes.

[00:22:52] The colleague of mine gave that to me.

[00:22:54] But I have to get the chime logo up there, I suppose now.

[00:22:56] But, okay, that was a startup industry.

[00:22:59] You needed to charge fees because you had to capitalize this shift.

[00:23:03] It was a massive capital investment.

[00:23:06] But now the market has sort of grown to a point where you don't need that investment.

[00:23:10] Like the dent has been made.

[00:23:13] Yeah, the dent has been made.

[00:23:15] And so then the question becomes, okay, am I still paying 99 cents to download my favorite Mariah Carey song from iTunes?

[00:23:24] Probably not.

[00:23:24] I'm now going to move to streaming.

[00:23:26] All you can eat.

[00:23:27] And now I pay $12 for Spotify and I get to listen to every Mariah Carey song in the shower as much as I want.

[00:23:35] Like that.

[00:23:36] And I think when people thought about this idea of, well, no, like there were CDs and then you bought the CD.

[00:23:46] Oh, my gosh.

[00:23:47] There's innovation.

[00:23:48] You could buy one song.

[00:23:51] And people said, how would we ever move from this?

[00:23:54] And then Spotify came along and said, well, let's stream.

[00:23:58] And our business model is actually we charge you a fee and we hope you don't listen to the songs.

[00:24:03] And they totally turned the business model on its head.

[00:24:06] And so we now make money based on the amount of time you don't listen to the song.

[00:24:11] Interesting.

[00:24:12] That is so like, and I have every Iota of confidence that the leaders and founders in this industry will find a way to go make it.

[00:24:24] Because at the end of the day, they're going to have to because folks have already spoken about this issue.

[00:24:28] Well, and look, I love your suggestion that somehow the banks, there are places where this can happen.

[00:24:35] It has already been happening de facto through the payroll companies.

[00:24:40] That's right.

[00:24:41] That are just making this bread and butter part of their bit.

[00:24:44] Digital wallets.

[00:24:44] There's no charge for separate things.

[00:24:47] It's a mechanism just like direct pay, direct debit.

[00:24:52] That's right.

[00:24:52] So, yeah.

[00:24:53] I mean, there's ways that it'll come about.

[00:24:54] But I imagine, you know, there were a lot of people choking on their on their donuts the morning of.

[00:25:06] But look, I tend to be a lot more upbeat about this stuff.

[00:25:10] This is innovation.

[00:25:11] It's an it's a huge opportunity.

[00:25:13] And the good news is it's not tax, meaning like you hate to have to like pay government tax.

[00:25:18] Sorry, pay a lowercase t tax on the system.

[00:25:21] This is innovation to actually help employees and help employers.

[00:25:26] And that's that those are good investments.

[00:25:29] Well, what would you be your advice, Jason, to to employers right now who are I mean, is it any different for someone who's already operating with an earned wage access solution versus someone who's considering?

[00:25:38] Let me use a term that unfortunately will show how it's going to date me and show my age here, which is I think a little bit.

[00:25:45] This is a little bit like in my opinion, like Y2K.

[00:25:49] Do you guys remember?

[00:25:50] Yes.

[00:25:51] Y2K.

[00:25:53] All right.

[00:25:53] So thank God.

[00:25:54] OK.

[00:25:54] So now I remember Y2K and that there's some listeners here who are curiously Googling that.

[00:26:02] And it's a little bit like Y2K in the sense that you can hide from it.

[00:26:06] You can debate it.

[00:26:07] You can avoid it.

[00:26:08] You cannot talk about it.

[00:26:09] But guess what?

[00:26:10] It's happening.

[00:26:12] And here's the thing.

[00:26:13] What what does that mean in this context?

[00:26:15] Zero fees is happening.

[00:26:17] Like it's inevitable.

[00:26:19] Like that is an inexorable trend.

[00:26:22] We are moving towards that trend.

[00:26:24] And the CFPB has accelerated that.

[00:26:27] But it probably, if we're honest with ourselves, was going to happen anyway.

[00:26:30] And so we are moving towards that trend.

[00:26:33] You can't avoid it.

[00:26:34] I call this Y2P.

[00:26:37] OK.

[00:26:38] It's going to happen.

[00:26:40] I love it.

[00:26:42] You can't do it.

[00:26:43] I love it.

[00:26:43] I love it.

[00:26:43] We need one of those lame drum rolls, right?

[00:26:47] All right.

[00:26:48] Maybe not.

[00:26:48] Maybe that one doesn't work.

[00:26:49] But the point of what I'm getting at is it's this is something you can't avoid.

[00:26:54] So what are we telling?

[00:26:55] What are employers asking about?

[00:26:58] Preparedness.

[00:26:59] Hey, I don't want to get caught flat footed.

[00:27:01] Tell me what my options are.

[00:27:03] How do I transition?

[00:27:04] How do I communicate?

[00:27:05] This is about preparedness.

[00:27:07] And the reason why nothing broke during Y2K is because everyone actually was prepared.

[00:27:14] And so this is a lot about what are like the five things I need to be asking?

[00:27:18] By the way, here, Pete and Julie.

[00:27:20] Here's a hilarious thing.

[00:27:22] Guess what?

[00:27:23] If I don't do zero fees and I'm considered a loan, and this is considered a loan rather,

[00:27:30] does that make me, the employer, a loan originator?

[00:27:35] A loan broker?

[00:27:37] I know.

[00:27:37] There's so many questions I have about this.

[00:27:39] But how do you calculate it even?

[00:27:40] Even the rate?

[00:27:41] Which is why I think people are saying, just go.

[00:27:44] We're going to zero fee.

[00:27:45] I don't want to answer.

[00:27:47] By the way, I don't know the answer to that question.

[00:27:49] But I don't even want to begin to explore what the answer to that question is.

[00:27:54] We're the folks that take out a small drip at a time, right?

[00:27:56] Oh, I just need 25 bucks.

[00:27:58] And then you have that.

[00:27:58] Yeah.

[00:27:59] And I've been wondering, too, just about their different ways that employers engage with

[00:28:04] their own wage access firms.

[00:28:05] You know, in some cases, you know, funds are actually transferred and moved, you know,

[00:28:10] at one point in time versus another.

[00:28:11] And so in my mind, you know, I'm sure I haven't sorted out, does this change how some of those

[00:28:19] mechanics work with employers who have an adversity to doing it one way versus another?

[00:28:25] You know, one way is more friendly than the other.

[00:28:27] And, you know, they are actually employers, the loan originator, right?

[00:28:33] Right.

[00:28:34] And what are the implications for that?

[00:28:35] Do I need a license to do that?

[00:28:37] Which, by the way, I think you probably do.

[00:28:39] And so these are all very tricky questions, none of which I have the answer to.

[00:28:43] A lot of unknowns.

[00:28:46] Except to say, you got to be prepared.

[00:28:48] Like, you should not be caught flat-footed on this.

[00:28:51] Be prepared.

[00:28:51] There's a very simple way forward.

[00:28:53] Hi there.

[00:28:54] I'm Peter Zollman.

[00:28:55] I'm a co-host of the Inside Job Boards and Recruitment Marketplaces podcast.

[00:29:00] And I'm Steven Rothberg.

[00:29:01] And I guess that makes me the other co-host.

[00:29:03] Every other week, we're joined by guests from the world's leading job sites.

[00:29:07] Together, we analyze news about general niche and aggregator job board and Recruitment Marketplaces sites.

[00:29:14] Make sure you sign up and subscribe today.

[00:29:19] Just offer something at zero fee.

[00:29:23] And there are innovations coming.

[00:29:25] So, Jason, just opining here, let's say five years from now, ten years from now, what does all this look like?

[00:29:31] I mean, just pay.

[00:29:33] Yeah, it's digital.

[00:29:33] We won't call it digital anymore.

[00:29:35] I mean, but do you think-

[00:29:36] No, no.

[00:29:37] I'm being serious.

[00:29:38] There'll be no concept of early pay.

[00:29:40] It will just be-

[00:29:41] Streaming pay.

[00:29:41] Pay.

[00:29:42] 100%.

[00:29:43] Like, this thing that I created and that others are now doing, it's an intermediate step.

[00:29:49] It's a great point.

[00:29:50] And you will want a bank account that is accurate.

[00:29:55] Meaning, right now, that bridge doesn't exist from a technology standpoint.

[00:30:01] But if you were to take kind of an interesting lens to this, one would say, well, my bank account balance is incorrect.

[00:30:09] Meaning, it doesn't-

[00:30:11] Remember in the old days, you get a paper check and you'd give it and then they would clear half of it or you wouldn't know where the check was.

[00:30:21] And, oh, my bank account is right?

[00:30:22] No, it only says $800.

[00:30:23] Yes.

[00:30:24] I deposited a $100 check.

[00:30:26] It's not accurate.

[00:30:28] That's the world we're headed to.

[00:30:29] I love the point where the banks have to do some innovation because, I mean, seriously, how many times you don't-

[00:30:35] I don't often do things walking into a bank branch, but if I'm depositing a check from one account at that bank to my husband's account at that bank, why on earth are you not posting that instantly?

[00:30:48] What is the seven-day, take seven days for you to reflect anything?

[00:30:52] Even-

[00:30:53] Float.

[00:30:53] Why is that even an issue?

[00:30:54] Float.

[00:30:55] What the hell?

[00:30:56] So, that's one.

[00:30:57] But then, Julie, think about this from a work standpoint.

[00:31:00] I'm paycheck to paycheck.

[00:31:02] I know I made that money.

[00:31:04] Why does my bank not see that balance?

[00:31:07] And I think that we at Chime, we are going to lead that charge.

[00:31:11] What we're going to say is, you know what?

[00:31:13] You're right.

[00:31:14] That bank account balance is wrong.

[00:31:16] It is not accurate.

[00:31:17] I agree.

[00:31:18] This really lends itself to my payroll everywhere concept where I think if you can take all the best parts of open banking, fintech, and I hate to use the word democratize, but democratize data where you have people giving these solutions,

[00:31:33] integrated access to their full picture of pay and wealth and retirement and whatever else.

[00:31:38] And all of those micro apps that we're using on our phones, right?

[00:31:42] You pull it out.

[00:31:42] Everyone's got a Chime or a PayPal or whatever.

[00:31:45] Robinhood, right?

[00:31:46] Acorns.

[00:31:47] It's making up some sort of financial picture, but none of it is talking to each other, right?

[00:31:51] So you're right.

[00:31:52] Unless you're a CPA, you can sit and calculate all this in real time.

[00:31:55] It's not really going to lend a whole lot of benefit to you collectively, but it can individually.

[00:32:01] And they're all making impacts in their own ways.

[00:32:03] But what if they could work together?

[00:32:04] And I think that sounds to me like what you're building at Chime, right?

[00:32:07] Is bringing together a platform.

[00:32:08] And by the way, that fragmentation or that lack of interoperability, it actually impacts the least fortunate the most.

[00:32:18] You know, you can afford, Pete, to have a little bit of like proceeds over here, a little bit of cash here, your Starbucks points over here.

[00:32:25] But that is actually harming the people who actually need the most control the most.

[00:32:30] So that's kind of the mission that we're on.

[00:32:31] Yeah, I love it.

[00:32:32] Well, look, this is exciting stuff.

[00:32:34] I said this about Money 2020.

[00:32:35] It was very eye-opening for me.

[00:32:37] I understood it, but it didn't click entirely until I got there about how leveling this is.

[00:32:43] FinTech is for the world population's access to money and the ability to touch and move money.

[00:32:47] And so I get excited for it.

[00:32:49] I know it's great for the workforce.

[00:32:50] I'd love to see it just sort of balancing things out in terms of, like I said, access to money and just being able to have means.

[00:32:57] It's a great thing.

[00:32:58] Love it, man.

[00:32:59] Keep doing what you're doing.

[00:33:00] I was going to say, where can we find you next?

[00:33:03] Are you going to be on the road?

[00:33:04] How do we connect with you?

[00:33:06] All right.

[00:33:07] Well, look, I don't know when this is going to run, but I will be at HR Tech at Mandalay Bay.

[00:33:11] And we will be showing the very, very first Chime Enterprise.

[00:33:20] Oh, very good.

[00:33:22] And we got a big 20 by 30, I think.

[00:33:25] And it'll be the first time in the history of HR Tech that Chime is showing.

[00:33:30] And guess what?

[00:33:32] I'll be right there spinning the wheel, handing out the T-shirts.

[00:33:35] He's Bob Barker.

[00:33:35] I'm a man of the people.

[00:33:37] I'm a man of the people.

[00:33:39] I'll be doing the sales.

[00:33:41] You are.

[00:33:42] I want to come over and hang out, man.

[00:33:43] I'd love to get a briefing and we'll hang out, take some video or maybe talk about what's going on over there, man.

[00:33:48] What do you guys got going on?

[00:33:49] So I'd love it.

[00:33:50] Definitely.

[00:33:50] We're hard at work trying to get our offering together, how we're going to position it.

[00:33:54] And we'll see you all in the days.

[00:33:56] Yeah, that's great.

[00:33:56] Will you guys be at Money 2020 as well?

[00:33:58] Not there.

[00:33:59] We will not be at Money.

[00:34:00] Sorry.

[00:34:00] Okay.

[00:34:01] Some of my partners will be.

[00:34:02] But not HR.

[00:34:03] No worries.

[00:34:03] Yeah.

[00:34:04] Well, good to see you guys at both.

[00:34:05] And thank you as always for coming on, man.

[00:34:07] We love it.

[00:34:07] You're always welcome.

[00:34:08] This is great insights.

[00:34:09] And I want to talk as this progresses, right?

[00:34:11] We may have to do a part two to this and give an update.

[00:34:15] So it's awesome.

[00:34:16] Julie, what do you got coming up?

[00:34:17] What's next for you?

[00:34:18] You know, well, I'm going to push again.

[00:34:20] I forget exactly when we'll be pushing this one out, but running the compensation survey, which I know Jason knows well, because we did a little bit of collaboration just to kind of help get some spot on questions together.

[00:34:32] We do very, very short surveys and there are 15 questions, right?

[00:34:37] It's not a whole big effort.

[00:34:39] And so I'm still pushing that.

[00:34:41] I'll be in New York coming up.

[00:34:42] And I refuse to start talking about all of the September places at this point in time.

[00:34:48] I know.

[00:34:49] I know.

[00:34:49] The fall tech event tour begins very soon.

[00:34:52] Fall events are coming up soon.

[00:34:53] Yeah.

[00:34:54] Well, look for us out there.

[00:34:55] Yeah, same.

[00:34:56] And I'll be out at HR tech.

[00:34:57] I'm getting started actually at the work human event in Boston area.

[00:35:02] I'm excited.

[00:35:03] I'm going to see my daughter and get to check out their products.

[00:35:06] And then, yeah, we're jumping right in with Workday Rising and HR tech.

[00:35:09] So it gets started in September and goes right on through November.

[00:35:12] So excited to see everyone out there.

[00:35:14] I can't wait to see what we call this one, because not only do we have Jason Bottles

[00:35:19] up leave, we have the zero fees is happening, and then we have the Y2Pay groaner.

[00:35:25] Like this is going to be the funnest one to name.

[00:35:28] We're going with the Y2Pay episode.

[00:35:31] Hey, Boat, let me say this, okay?

[00:35:33] Like I think I heard someone say you, you know, you invite your friends over for dinner,

[00:35:38] but your best friends are the ones who eat the food off your plate.

[00:35:41] And let me just tell you this, this job is a hard job.

[00:35:44] You guys have a hard job.

[00:35:45] I have a hard job.

[00:35:46] What makes it better is like friendship.

[00:35:48] And so I appreciate your guys' professional relationship, your friendship.

[00:35:52] I love coming on the show and thank you for having me.

[00:35:54] All the, all the same here, man.

[00:35:56] We feel the same way, Jason.

[00:35:57] Appreciate you taking the time and yeah, we'll all be back soon.

[00:36:00] Thank you so much.