Deel, a payroll and compliance platform for remote teams, added payroll advance functionality.
The new feature, dubbed Deel Advance, allows remote workers around the world to access up to 100% of their pay up to 30 days in advance, without predatory interest rates or conditions.
It’s a feature that users have been asking for, especially in this environment, when urgent or unforeseen expenses can cause people to turn to high interest credit cards or expensive personal loans to fill the gap, said. Alex Bouaziz, CEO of the company, in an interview with Forbes. . Having quick access to cash can be especially difficult for remote workers who don’t necessarily get paid on a bi-weekly or monthly schedule.
Indeed, quick access to much-needed cash is a growing problem for workers of all types. As recently as today, bill payment company doxo released data showing that 42% of Americans have failed to pay one or more bills since the start of the pandemic.
Especially in the midst of the pandemic, U.S. banking regulators have pressured banks to work to make access to low-cost funds faster and easier so consumers don’t have to turn around. towards payday lenders or resort to other high cost means. 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 is no credit check or other approval process. Users can receive cash advances of up to $ 50 at no cost, an option that could be very appealing to those who just need a little help getting by, according to Bouaziz.
Otherwise, a 2% charge applies. The advance is reimbursed as soon as the next paycheck arrives, with no interest applied to the amount borrowed, which the user repays the advance in nine days or nine months, for example.
In contrast, with a payday loan, fees could range from $ 10 to $ 30 for every $ 100 borrowed, depending on state law and the maximum borrowing amounts allowed 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 only pay $ 20 for the same amount, considered an advance. And unlike a payday loan, there is no renewal or renewal fee with a Deel advance.
Deel has experienced substantial growth this year, now supporting around 600 companies and thousands of employees in their teams. Since May, Deel has raised $ 44 million in Series A and Series B funding and its customer base has doubled, the company said. Over 60% of its corporate clients are located in the United States. Thirty percent of its end users are based in the United States.