Revolut Wage Advance

Seems a little predatory :joy:

Can anyone read the whole thing, I can only read the first para & it seems to be the only article

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I have read the whole thing.

It says that the scheme will only be open to partner employers who have signed up with Revolut, and employees will have to have their salary paid directly into Revolut to use it (no surprise).

There are also worries that the fixed charges levied for each transaction are akin to high interest rates for customers who repeatedly draw forward their pay.

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Right. Still, I should imagine its their medium term objective to roll it out? How they’d verify a salary from another employer I’m not so sure…

Edit, just seen the partner employer sentence doh

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There are companies out there that do these advances and nothing else. When you look at it in APR terms it’s a rip off.

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I can see how this might help. I’d be a little concerned of how this could lead someone down a slippery slope of debt and spending next months wage before it’s even due.

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This is gross. Just another way to push unaffordable lending. But if it makes you millions…

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Agreed. Moving into Klarna territory acting like a wolf in sheep’s clothing…

Incentivises me to move some of the load of my day to day finances away from them

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Correct me if I’m wrong, but it appears to cost £1.50?
Compared to standard market overdraft rates of 39% - hardly seems excessive.

Given its a flat fee it depends how much the person advances I suppose…its only really cost effective at a larger amount

If you’re talking £1.50 to borrow £50 where you effectively repay it in a week due to the deduction, that’s quite high in an Apr calculation as opposed to simple interest

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According to this post a typical payday loan is about £200 for 7 days. If that’s correct, and my math is correct, then £200 @ 40% apr (a fairly standard overdraft apr these days) for seven days cost £1.31 or so, so would be very comparable in cost.

But obviously the problem with fixed fees, as @Rexx rightly points out, is always that it’s essentially impossible to compare them with APR based loans, which is why fixed fees are now banned for overdrafts.

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Your understanding is simply unrealistic.

Firstly, who’s salary/wages are £200?

Secondly, many payday loans are much more expensive than 40% APR. e.g. Drafty advertises that it’s cheaper than those and it’s representative is 89.7% APR

Thirdly, you are assuming the people most likely to use this service would have access to low to standard APR credit.

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Any chance of a copy and paste of the article?

Just difficult to add to the topic without knowing a little more……:confused:

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The quote was about an average payday loan being £200 - it didn’t say anything about salary or wages

Indeed. I spoke about overdrafts rather than payday loans.

I’m not. I’m making the point that the pricing of this service is comparable to overdrafts rather than payday loans, making it a lot cheaper than alternatives, so in essence I’m agreeing with and supporting your own post up here:

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I don’t think it’s fair to copy and paste the whole thing, but here is the key bit in terms of how it works:

Revolut, which has 3.5 million UK customers, will charge a flat fee of £1.50 every time a user accesses the pay they have accrued throughout the month, up to a limit of 50 per cent earned the day after each new pay cycle begins.

The rest of the article is light on detail and is pretty much a puff piece talking about how regulators have expressed “concern” about payday lending but haven’t yet decided to crack down on it, with a few quotes from Revolut on how they think the feature will be helpful.

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Spotted by @nanos

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‘payday’ is now live in my app…

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Quite frankly, I’m amazed the UK financial services watchdogs have even allowed this to happen. I have no idea, but perhaps the watchdogs have no powers to stop this? or perhaps they aren’t actually interested. It’s another disaster awaiting to happen perhaps?

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Did you manage to find any employers that offer the service? Out of sheer nosiness I had a go at finding any company that might offer it. You need to start typing 3 letters before the search returns anything. I couldn’t find any matches, except for Revolut themselves.

So while many are bemoaning this (optional) facility, there’s little to worry about if no employer actually offers the service!

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I’d imagine it won’t take long.
My company uses wagestream to access pay early and has done so for around 18 months. I’ve never used it but Revoult isn’t a pioneer in doing this but will get a lot more attention from it and unfortunately it will be popular in the future I will predict (feel free in 2 years to say it hasn’t worked).

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Can only see revolut on there

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