Seems a little predatory 
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 theyād verify a salary from another employer Iām not so sureā¦
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 itās a rip off.
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I can see how this might help. Iād be a little concerned of how this could lead someone down a slippery slope of debt and spending next months wage before itās even due.
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This is gross. Just another way to push unaffordable lending. But if it makes you millionsā¦
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Agreed. Moving into Klarna territory acting like a wolf in sheepās clothingā¦
Incentivises me to move some of the load of my day to day finances away from them
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Correct me if Iām wrong, but it appears to cost Ā£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 supposeā¦its only really cost effective at a larger amount
If youāre talking Ā£1.50 to borrow Ā£50 where you effectively repay it in a week due to the deduction, thatās 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 Ā£200 for 7 days. If thatās correct, and my math is correct, then Ā£200 @ 40% apr (a fairly standard overdraft apr these days) for seven days cost Ā£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 itās 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, whoās salary/wages are Ā£200?
Secondly, many payday loans are much more expensive than 40% APR. e.g. Drafty advertises that itās cheaper than those and itās 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 moreā¦ā¦
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The quote was about an average payday loan being Ā£200 - it didnāt say anything about salary or wages
Indeed. I spoke about overdrafts rather than payday loans.
Iām not. Iām 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 Iām agreeing with and supporting your own post up here:
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I donāt think itās 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 Ā£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 āconcernā about payday lending but havenāt 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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āpaydayā is now live in my appā¦
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Quite frankly, Iām 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 arenāt actually interested. Itās 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 couldnāt find any matches, except for Revolut themselves.
So while many are bemoaning this (optional) facility, thereās little to worry about if no employer actually offers the service!
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Iād imagine it wonāt take long.
My company uses wagestream to access pay early and has done so for around 18 months. Iāve never used it but Revoult isnāt 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 hasnāt worked).
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Can only see revolut on there
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