Digital transformation of payroll processes with the initiative of Instant Payroll and Flexible Payroll promises to be a lifesaving solution for businesses and employees in the current context.
Post-Covid-19 and the global economic recession caused many businesses globally and domestically to come to a standstill, production was halted, human resources were reduced and cash flow was difficult. Laborers also face many problems in terms of income, especially workers in factories and industrial zones. Therefore, it is difficult for businesses to have enough money to pay wages on time, let alone for employees to advance wages to cover their living expenses.
According to statistics, the mainstream financial market currently accounts for only about 25% and only serves people in the city who work in offices. As for workers, freelancers, banks or financial institutions still seem to be untouchable. Therefore, the underbank market is still a potential market.
Around the world, with the strong application of technology and the combination with financial institutions, the flexible salary model Earned Wage Access (EWA) is developing rapidly, such as PayActiv, a startup. in the US has grown 4 times during the Covid pandemic and has raised $ 134 million, or like DailyPay, a British payroll company that has raised $ 514 million in the latest funding. And large corporations like Walmart have also applied the early pay model for their 1.4 million employees.
According to a 2018 Harvard Kennedy School study, PayActiv users at least twice have a 19% lower turnover rate than PayActiv users only once.
According to some other studies, the majority of employees expressed their willingness to move to an enterprise with flexible salary benefits so that they can advance their salary when needed. Some low-income working families experience financial stress 1-2 weeks before the pay period. At this time, the instant payroll service can help them avoid facing bad debts, black credit traps.
In Southeast Asian countries and Vietnam in recent years, under the strong investment of banks and financial institutions in the digital transformation of the banking industry, and financial technology companies have also begun to grow. with more accessible services through technology solutions, smartphone applications. Although the instant payroll service is still quite new, according to the survey of employees, they are very excited to hear and use this service.
Through smartphones, people who were previously afraid to go to bank transaction offices can now easily make money transfers, borrow money or advance salary quickly through apps. However, because the legal corridor is not specific and clear, the activities of fintech or digital finance companies have not really exploded and expanded.
mBox is a company operating in the field of financial technology (fintech) that has launched an initiative to apply technology, linking with banks to allow employees to receive instant salary whenever they want. needed without having to ask for permission or wait, as long as the employee works at that enterprise and has a recorded working day.
The operating mechanism of mBox is also very transparent, as long as businesses sign a contract with mBox, in order for mBox to connect to the enterprise’s attendance management system, employees when downloading the mBox app will only need to register. the first time the authentication information that the business has provided to mBox, from the next time the employee just needs to open the app and enter the amount to be advanced within the allowable limit (the limit increases gradually according to the number of working days worked). ) is the advance money will be automatically transferred to the employee’s account within 30 seconds with a reasonable transaction fee.
At the end of the month, the amount that the employee advances will be deducted from the salary without incurring any other fees or interest. This solution helps businesses not only spend no more on human resources to handle advance requests, but also do not have to prepare cash flow for advances, and also help employees get money right away. needed, without being entangled in black credit with extremely high interest rates, helping them feel secure to work and stick with the business more.
In the context that businesses are facing financial difficulties and workers’ lives are affected, an instant salary payment solution like mBox promises to create a revolution in paying employees’ wages, making businesses feel better. Businesses can digitally transform in terms of salary payment and advance, creating an unprecedented welfare regime for employees, helping to recruit and retain employees effectively, and improve work efficiency. job.
Vietnam has the potential and opportunity to develop into a major production center in the region and the world, when capital flows and global supply chains in the manufacturing sector are moving to our country. As the labor market develops, so will welfare standards. Therefore, the development potential of fintech companies like mBox is very much, but stronger involvement from the government and authorities is needed to issue clear regulations, regulations and laws to have a can rest assured to invest in developing more convenient services for people and operate more sustainably.