Deel adds a salary-advance feature for remote workers.
Deel, a payroll and compliance platform for remote teams, has added a payroll-advance feature.
The new feature, dubbed Deel Advance, allows remote workers around the world to access up to 100% of their paycheck as much as 30 days in advance, without predatory interest rates or strings attached.
It’s a feature users were asking for, particularly in this environment, when emergency or unexpected expenses may lead people to turn to high interest credit cards or costly personal loans to bridge the gap, Alex Bouaziz, the company’s chief executive, tells Forbes in an interview. Having quick access to cash can be particularly difficult for remote workers who aren’t necessarily paid on a set biweekly or monthly schedule.
Indeed, getting access to much-needed cash quickly is a growing problem for workers of all types. Just today, bill pay company doxo released data showing 42% of Americans have skipped paying one or more bills since the pandemic started.
Especially amid the pandemic, U.S. banking regulators have been pressing banks to address making access to low-cost funds quicker and easier so consumers don’t have to turn to payday lenders or rely on other high-cost avenues. Some banks, including Bank of America
The cash advance feature is available to any Deel user who has worked with the same company for more than three months. There are no credit checks or other approval procedures. Users can receive advances of up to $50 at no cost, an option that could be very appealing to those who just need a little help to get by, according to Bouaziz.
Otherwise, a fee of 2% applies. The advance is paid off as soon as the next paycheck arrives, with no interest applied on the sum borrowed whether the user pays back the advance in nine days or nine months, for instance.
By contrast, with a payday loan, the fee could range from $10 to $30 for every $100 borrowed, depending on state law and the maximum borrowing amounts permitted by the state, according to the CFPB.
So while for a payday loan, a user might pay $150 for $1,000, a Deel user would be charged only $20 for that same amount, taken as an advance. And unlike a payday loan, there are no renewal or rollover fees with an advance from Deel.
Deel has growth substantially this year, now supporting around 600 companies and thousands of employees on their teams. Since May, Deel has raised $44M in Series A and Series B funding and its customer base has doubled, the company said. More than 60% of its corporate clients are in the U.S. Thirty percent of its end-users are U.S.-based.
