Revolut is now offering its customers the opportunity to be paid a day early in a move that will prove popular as people struggle with pandemic uncertainty.
Revolut customers that receive a salary payment via Bacs credit – which the majority of the population does – will be able to access their salary a day early.
It is the latest move by the challenger to encourage customers to use its current account as their sole bank account by getting their salary paid in, as it tries to make a profit. Its rival Monzo rolled out a similar early salary feature last year.
The new feature, which will apply to any Bacs payment including pensions and student loans, has been launched in collaboration with Revolut’s long-term payments partner Modulr.
“Early access to salaries could be a genuine lifeline for many during these tough economic times,” said chief executive Nik Storonsky. “Our aim is always to provide Revolut customers with services they need and the best possible experience.”
The launch comes at a critical time for many UK employees who are faced with increasing financial pressure amid a new wave of coronavirus restrictions. Revolut’s new feature will give people the option to access their own money rather than relying on credit cards and overdrafts, just in time for Christmas.
Salary advances have become increasingly popular during the pandemic, with fellow fintech Wagestream, backed by the Joseph Rowntree Foundation, seeing a significant uptick in customers this year.
Wagstream charges employees £1.75 per transaction and charges employers who use the service a fee of between £1 or £2 per employer.
Although many people have been left in precarious positions due to the pandemic, salary advances have come under criticism by the regulator.
Earlier this year the Financial Conduct Authority (FCA) raised red flags over the industry citing its lack of regulation and warned of transparency around costs.
Critics say that like the Buy Now Pay Later Schemes, such as Clearpay and Klarna, the services can push consumers further into debt.