How a company is creating a new financial system to help today’s workforce

Five years ago, DailyPay co-founder and CEO Jason Lee was trying to order a pizza on Grubhub when a question popped into his mind: Why isn’t Domino’s on Grubhub? He went to a bistro owner, who happened to be a friend of his, and asked to read their Grubhub Merchant Agreement. “When I finally read it, I found out that we as consumers pay for the pizza tonight when we order it. But Grubhub doesn’t actually pay the restaurant owner for 45 days.”

From there, he set out to solve this cash flow problem. “I wondered if this had an impact not only on restaurants, but also on ordinary Americans. And when I started digging, I realized it was like payroll. Every day we work and that money is ours, but we don’t get paid for that work for weeks. And that’s really where the DailyPay story began.

Lee sat down with us to share how his business works and his thoughts on the future of pay-as-you-go.

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What were the first steps you took to launch DailyPay?

The first thing I did was research the problem. What I found was that 80% of Americans were living paycheck to paycheck at that time. This problem of actually working today, but not having access to that money for weeks later, was impacting the vast majority of Americans. And so I became passionate about this problem. I went out to talk to people on the streets in different parts of the country about how they were dealing with this asynchronicity, and I got all kinds of weird responses. I had things like “Well, I have to borrow from friends and family”; “I have to go to a payday lender”; “I emptied my bank account.” But the most common response was, “I just pay for things late. I usually pay a $35-$50 late fee with that.”

I really wanted to use the experience I have in financial engineering combined with the experience of my co-founder, who was a web developer. We got together in my basement and started coding the product about six years ago, and the rest is truly history.

Tell us how DailyPay works.

DailyPay is a super simple app through your employer. We offer you an application, and this application shows very simply how much you have earned in real time at that minute on a given day in a given week. And this balance accumulates every minute you work. The technology essentially calculates exactly what is owed to you. It really is your money. You just haven’t received it yet. And then what all of our funding and fintech does is they provision those funds into your app. And so, for example, if you’ve ever worked and earned $189 and 55 cents, based on what our technology has figured out about you – and that’s on a net basis – that’s provisioned in your app. Think of it like Square, or maybe Venmo or PayPal. Once that money is in the app, that money can be transferred instantly. It’s like any other app you might have on your phone, except this time it’s with money you haven’t received from your employer yet, but have already earned, visa VR technology.

How can companies listening to you or reading this right now work with you?

We work with a lot of big companies who offer this to their employees, but we also work with companies you haven’t heard of, [like] a 1,000-person nursing home in mid-Tennessee that employs a number of hard-working essential workers who need to ensure their employees are financially healthy and can pay their bills on time. Plus, it’s a great recruitment and retention tool.

In addition to running DailyPay, you and your wife created the Alicia and Jason Lee Foundation. Can you tell us about some of your projects?

Hate crimes against Asian Americans rose 335% in the last year in New York alone. The reality is that there are a lot of New Yorkers who frankly don’t feel safe, either on the subway or maybe even walking in their own neighborhood. And so what we do is we sponsor free self-defense classes in multiple locations around town. It first started with older Asian Americans. Interest in our class has been so great that we have now extended it to all demographics, all ages, and classes continue to grow.

Can you tell us where you think the future of finance is headed and what role on-demand payment will play in the future?

I think pay-as-you-go won’t exist in the future. Which means, forget that notion that it’s special, that just because you work for an employer that offers this benefit, you can now control the timing of your own payroll. It should be how the compensation already exists, because the reality is that it’s your money. It’s just that it’s not accessible yet. And so our vision for the future is that the payroll amount will be completely fungible with your checking account, with your savings account, with your brokerage account, because the common thread in all of those things is that it’s your money and you should have access to it, whenever you want.

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