- Citizens Bank's corporate clients will now be able to offer their employees on-demand access to their wages, the bank announced Wednesday.
- The bank claims the service can be up and running within 30 days and is working with an unnamed third-party vendor to provide the product to its corporate customers, said Matt Richardson, a Citizens executive vice president.
- The $188.4 billion-asset bank joins a growing number of institutions partnering with third-party payment fintechs to offer corporate clients a competitive advantage in a tight labor market.
The on-demand wage access is part of Citizens' efforts to widen its offerings beyond its standard products, said Kavita Kurella, senior vice president and director of product strategy and merchant services at Citizens.
"As part of our ongoing innovation and working with our clients, we are looking to expand our solution set above and beyond the core banking products as it relates to bank agnostic and treasury adjacent solutions," Kurella said. "And earned wage access is part of that ongoing innovation."
The Providence, Rhode Island-based bank said it believes the earned wage access product will appeal to businesses looking to attract and retain talent in a competitive marketplace.
"It doesn't really cost the employer anything to offer it," said Richardson, who runs the product management group within Citizens' treasury solutions business. "It can really resonate with the staff and help [the employer] in both recruiting and retention."
On-demand wage access allows employees to receive their wages in real time instead of waiting for the end of the typical pay period. The third-party vendor provides the liquidity and is reimbursed on the regular payroll schedule.
Richardson called on-demand wage access an emerging trend spurred by the growth of the gig economy. The offering, however, is becoming more pervasive and more mainstream among employers with hourly employees, he said.
"We became aware of it and we started going out to our corporate and our commercial clients to ask, 'What do you think about this?' Our customers look to us to bring them ideas and keep them abreast of developments," he said. "They weren't overly familiar with this offering. But then when we talked to them about it and explained it, they could immediately see the value in it."
The bank doesn't have any product users yet, but Richardson said it is in active conversations across the franchise.
"We think there's going to be some good uptake," he said.
Several other large financial institutions have introduced on-demand wage products this year.
U.S. Bank announced in February that employees at organizations that use its prepaid U.S. Bank Focus Card for payroll disbursements can access a portion of their earned wages on demand through an immediate direct deposit.
The Minneapolis-based bank is partnering with financial-wellness platform Payactiv to offer the service.
Also in February, Pittsburgh-based PNC launched PNC EarnedIt, an early wage access product through a partnership with payment fintech DailyPay.