[ludwigschubert]

It’s great that you’re finding a way to pay people quicker that’s less bad than payday loans!

What stops employers from paying wages more often right now? When I worked in the US, some places would pay you every two weeks. With instant bank transfers, couldn’t that frequency go down to weekly or daily, without the need for a middleman?

[asukhwani]

100 years ago, people were paid just after they worked. There are two reasons why that stopped being the case. Firstly, it’s a lot of work for the company. Secondly, it’s worse for the company’s cash flow. As others have also replied, the first is most significant.

[II2II]

A lot of it would depend upon how payroll is handled. There are plenty of employers where the hours worked are written on paper, then transcribed to a common document format and sent to payroll, then transcribed into the payroll software. Since so much of the process is manual, it is likely to be batched and performed weekly. Even when it is done daily, the daily is unlikely to include weekends (which is shifted to end of day Monday). In other words, they would have to completely alter their process to actually pay daily. That alone would likely make the process more expensive. Doing more bank transfers would add more expenses. The software used to handle payroll is a middleman for all intents and purposes, and that is unlikely to go away.

For what it's worth, I have seen that process used in both the private and public sector as well as with organizations that employ thousands of people.

[jkhdigital]

As with most components of the financial system, change is very slow and painful because even when technology exists that leapfrogs previous bottlenecks (i.e. batching due to delays in information flow) the behavior of people and organizations is tightly adapted to the existing expectations. As it stands, most employers effectively get free 2-4 week payment terms from their largest suppliers (i.e. their employees) which, if removed, would immediately increase their working capital requirements by a substantial margin.

[yunohn]

> There are plenty of employers where the hours worked are written on paper, then transcribed to a common document format and sent to payroll.

My understanding of this solution is also that it depends on the payroll systems? As such, they also depend on manual batching effectively, before the advance can be paid.