DailyPay
DailyPay is an American financial technology company founded in 2015 that operates an on-demand pay platform, allowing employees to access a portion of their earned wages before the traditional payday through real-time tracking and transfers to bank accounts, debit cards, or prepaid cards, typically for a fee of up to $3.49 per instant transfer.[1][2] Headquartered in New York City and co-founded by Jason Lee and Robert Law, the company integrates with employer payroll systems to provide this earned wage access service, which it positions as a tool for financial wellness by reducing reliance on high-interest alternatives like payday loans.[3][4] DailyPay has achieved rapid growth, ranking 185th on the 2024 Deloitte Technology Fast 500 with 640% revenue increase over three years, and has raised over $1.7 billion in funding, attaining a $1.75 billion valuation in early 2024 while preparing for a potential initial public offering.[5][3][6] The service has faced regulatory scrutiny, including a 2025 challenge from the New York Attorney General alleging its fee structure equates to high-interest loans, which DailyPay contests in court by arguing it advances employees' own earnings without creating debt.[7][8] User complaints have centered on customer support delays and occasional overpayment recovery issues, though the platform serves millions across sectors like retail and hospitality.[9][10]Company Overview
Founding and Headquarters
DailyPay was founded in 2015 by Jason Lee, who served as its initial CEO, and Robert Law, who served as its chief technology officer.[2][4] The company's inception stemmed from observations of financial challenges faced by hourly workers, such as those encountered by Lee during a visit to a restaurant shortly before founding the firm.[4] DailyPay is headquartered at 55 Water Street, Floor 42, in New York City, New York, 10041.[11][12] This location has remained the company's primary base as of 2025, supporting its operations in the financial technology sector.[3]Mission and Core Operations
DailyPay's mission centers on empowering frontline and hourly workers with greater financial control by providing access to their earned wages on demand, thereby addressing inequities in traditional pay cycles and fostering financial resilience. The company describes its approach as "Progress With Purpose," aiming to improve lives through innovative financial solutions that enable workers to manage daily expenses without relying on high-cost alternatives like payday loans.[13] This mission is operationalized via an earned wage access (EWA) platform that integrates seamlessly with employers' human capital management (HCM), payroll, and time-tracking systems, allowing real-time tracking and disbursement of pay as it is earned.[13][14] At its core, DailyPay facilitates on-demand pay transfers, where employees can access up to 100% of their accrued earnings before the scheduled payday, with the remaining balance automatically disbursed on the regular pay date at no additional cost. Employees initiate transfers through a mobile app to eligible debit cards, pay cards, or bank accounts, with options for instant access (incurring a flat fee, typically $3.49 as of recent implementations) or standard processing (1-3 business days, fee-free).[15][14] Employers maintain their existing payroll processes, sending the full net pay amount to DailyPay on payday, which then handles prior transfers and routes the balance to employees, ensuring no disruption to cash flow timing or costs.[15] This model differs from credit-based lending by tying disbursements strictly to verified hours worked, reducing risks of overextension while promoting budgeting through in-app tools for savings and expense tracking.[14] The platform's operations emphasize accessibility, requiring no preexisting bank account and supporting a broad range of workers, including those in hourly roles prone to cash flow gaps. By enabling early wage access, DailyPay claims to mitigate financial stress—evidenced by internal data showing 53% of users viewing EWA as critical for job retention decisions—while benefiting employers through improved retention and productivity, with 95% of client companies reporting positive outcomes.[13][14] These mechanics align with the mission by prioritizing empirical financial empowerment over traditional bi-weekly delays, though adoption depends on employer partnerships and varies by transfer limits set in policies.[14]Business Model and Products
Earned Wage Access Mechanics
DailyPay's earned wage access operates through seamless integration with an employer's existing human capital management (HCM), payroll, and timekeeping systems, enabling real-time tracking of employee hours worked without altering standard payroll processes.[14][16] The platform supports connections to over 180 such systems, with implementation typically requiring as little as 15 minutes to two weeks, depending on the employer's setup.[14] Once integrated, DailyPay receives daily data on gross earnings from verified shifts or hours, calculating an employee's available balance as the product of total reported gross earnings and an individualized advance rate—derived from the employee's historical pay data to estimate net availability—minus any prior transfers.[17][18] This advance rate ensures access to a portion of earned wages, often up to 100% in principle, though practically limited to projected net amounts after anticipated deductions.[14][19] Employees access their available balance via the DailyPay mobile app, where they can initiate transfers on demand, typically after each shift or daily.[14] Transfer options include automated clearing house (ACH) deposits to a linked bank account, with standard processing taking 1-3 business days at no fee, or instant transfers for a flat fee of approximately $2.99 to $3.49 per transaction, varying by employer agreement.[20][21][22] Instant transfers to a DailyPay-issued Visa prepaid card may incur no fee if the employee's direct deposit is routed there, with limits such as up to five same-day transfers per day.[23][22] DailyPay funds these advances directly, without requiring credit checks or interest charges, positioning the service as access to already-earned compensation rather than lending.[19][24] On the employer's scheduled payday, reconciliation occurs automatically: the payroll system deposits the full net pay—after taxes, withholdings, and deductions—directly to DailyPay, which retains the amount corresponding to prior advances plus any transfer fees before disbursing the remainder to the employee.[25][14] This process ensures employees receive their complete earnings for the period without overlap or shortfall, while employers incur no direct costs or administrative burden beyond initial integration.[14] The mechanics emphasize transparency, with the app providing ongoing visibility into earnings, transfers, and remaining balances to facilitate budgeting.[19]Fee Structure and Additional Services
DailyPay's core fee structure for earned wage access involves no charge for standard transfers received within 1-3 business days or via direct deposit to a linked bank account.[26] Instant transfers, branded as "Now" access, incur a flat fee typically of $3.49 or less per transaction, though this amount may vary based on the employer's contract with DailyPay.[27] [26] Employers may subsidize or waive these fees in some cases, but employees bear the cost when utilizing the service unless otherwise specified.[28] The DailyPay Card, a Visa prepaid debit card integrated with the platform, carries no monthly service fee, no fee for direct deposits, and no charge for standard bank transfers or instant transfers to the card.[29] [30] However, reloading the card with cash at Green Dot Network locations may incur fees of up to $5.95, depending on the retailer.[29] ATM withdrawals and other card-specific transactions follow standard Visa prepaid terms, with in-network fees often at $0 but out-of-network potentially higher.[31] Beyond wage access, DailyPay offers additional services through its Perks program, which provides discounted access to financial products including insurance, bill payments, subscriptions, tax preparation, and filing services.[32] The platform also includes financial wellness tools such as credit monitoring, goal-based savings options, and educational resources to promote better financial habits among users.[33] These services aim to reduce reliance on high-cost alternatives like payday loans, though participation is optional and may involve third-party provider fees not controlled by DailyPay.[34]History
Inception and Early Development (2015–2018)
DailyPay was founded on November 1, 2015, by Jason Lee and Rob Law in New York City.[4] Lee, a former Goldman Sachs executive with nearly two decades of Wall Street experience, co-founded the company with Law, an engineer previously at ReferralExchange, to address delays in wage access for hourly workers.[4] [35] The inception stemmed from Lee's observation during a restaurant visit of employees facing financial strain due to rigid biweekly pay cycles, prompting a focus on enabling instant access to earned wages to reduce reliance on high-cost credit.[4] Initial development centered on building a digital platform that integrates with employer payroll systems, allowing employees to transfer earned pay daily to a debit card or bank account via web or mobile app.[4] The service launched in January 2016, initially targeting tipped and hourly workers, with early integrations to HR platforms like Workday and Oracle to facilitate seamless data flow and compliance.[36] [4] By mid-2017, the platform had processed its 1 millionth payment, reflecting month-over-month customer growth of 30% since inception, as employers adopted it to improve employee retention amid labor shortages.[36] Funding supported rapid prototyping and scaling: DailyPay secured a $5 million Series A round on September 6, 2016, led by investors including One Ventures, to refine technology and expand partnerships.[37] A Series B round of $18 million followed in 2017, enabling the launch of employer-integrated on-demand pay features that automated wage transfers without altering payroll cycles.[13] The Series C infusion of $55 million in 2018 further bolstered infrastructure for broader adoption, marking the transition from pilot testing to operational maturity.[13] These rounds underscored investor confidence in the model's potential to disrupt traditional payroll by prioritizing worker liquidity over lending.[37]Expansion and Scaling (2019–2022)
In 2019, DailyPay raised $2 million in an early-stage venture capital round designated as Series B2, bringing its total funding to approximately $25.8 million and supporting further product refinement and market penetration.[3] This infusion enabled enhancements to its on-demand pay platform amid growing demand for flexible wage access solutions, particularly as economic uncertainties began to highlight the limitations of traditional bi-weekly payroll cycles.[38] The company's scaling accelerated in 2021 with a landmark $500 million capital raise announced on May 18, comprising debt and equity financing aimed at transforming its infrastructure to serve larger enterprises and expand earned wage access to more workers.[39] This funding, drawn from institutional investors, facilitated operational expansions, including integrations with major payroll providers and recruitment of talent to handle increased transaction volumes during the COVID-19 pandemic, when on-demand pay adoption surged due to workforce financial instability.[38] By early 2022, DailyPay secured a $300 million revolving credit facility from Barclays, providing liquidity to underwrite receivables and scale disbursements without relying solely on equity dilution.[40] This debt structure reflected maturing business operations capable of generating predictable cash flows from fees on advances. Later that year, the firm attracted acquisition interest from Chime, with offers reaching $2 billion—including $700 million cash, $1.2 billion in stock, and $100 million in restricted units—which DailyPay's board rejected, underscoring confidence in its independent growth trajectory and implying a valuation exceeding competitor bids.[41] [42] These financial milestones coincided with broader adoption, as evidenced by partnerships with hospitality employers serving thousands of hourly workers, contributing to reduced turnover rates among participating staff.[43] Internal promotions and team expansions in mid-2022 further indicated scaling efforts to manage heightened operational demands.[44] However, the rejected acquisition bids precipitated leadership changes, with co-founder Jason Lee departing amid board disputes over strategic direction.[45]Recent Milestones (2023–2025)
In 2023, DailyPay earned multiple industry recognitions, including the Business Intelligence Group's Sales and Marketing Technology Award, OnCon's Top 100 Human Resources Team Award, and G2's designation as Leader in Earned Wage Access.[46] The platform facilitated over $7 billion in wage transfers by users throughout the year, reflecting sustained adoption amid economic pressures on workers.[47] Integration with Workday's Human Capital Management and Payroll systems was established, laying groundwork for broader enterprise compatibility.[48] On January 18, 2024, DailyPay closed $175 million in transactions, comprising $75 million in equity led by Carrick Capital Partners and $100 million in credit facilities, elevating its valuation to $1.75 billion and supporting operational scaling.[49] In October 2024, the company secured an additional $100 million credit commitment from Citi, expanding its revolving secured debt facility to $760 million.[50] DailyPay was named to Inc.'s 2024 Best in Business List for established companies, acknowledging customer expansions and operational achievements, and ranked 185th on the Deloitte Technology Fast 500 with 640% revenue growth from 2020 to 2023.[51][52] It also received the 2024 Workday Partner Innovation Award in Financial Services and Insurance.[53] In 2025, DailyPay completed its inaugural $200 million asset-backed securitization of On-Demand Pay receivables on June 30, creating a novel asset class and bringing total debt financing backed by such receivables to nearly $1 billion.[54] On August 19, Workday designated DailyPay as its exclusive strategic partner for on-demand pay in the U.S. and Canada, enhancing integration and access for millions of workers via Workday's HCM and payroll ecosystem.[55] Subsequent partnerships included integrations with APS on September 10 for seamless financial wellness offerings to U.S. employers and isolved on September 16 to extend On-Demand Pay to small businesses.[56][57] DailyPay launched its "Perks" offering on September 17, providing curated discounts on recurring bills and services like health insurance through partners such as Stride, aimed at bolstering user financial flexibility.[58] The company advanced international expansion with a planned Canada launch in May, supported by the Workday alliance.[59]Funding and Financial Growth
Investment Rounds and Key Investors
DailyPay has secured funding primarily through equity venture rounds in its early stages, followed by substantial debt financings to support scaling operations in the earned wage access sector. Total equity raised exceeds $300 million across multiple series, with key early backers including RPM Ventures and later growth investors like Carrick Capital Partners. Subsequent debt facilities, often structured as revolving credit or securitizations from major banks, have provided over $1 billion in additional liquidity, reflecting the capital-intensive nature of liquidity provision to employers and employees.[3][60] The company's funding trajectory began with seed and Series A capital to develop its platform, transitioning to larger Series B through D rounds amid product-market fit and employer adoption. Post-2021, emphasis shifted to non-dilutive debt to fund working capital needs without further equity dilution, involving institutional lenders like Citi and Barclays. Valuation details remain private, though a January 2024 equity infusion implied a 75% increase from prior marks, underscoring sustained investor confidence despite fintech sector headwinds.[61]| Date | Round Type | Amount | Key Investors/Lenders |
|---|---|---|---|
| September 6, 2016 | Series A | $5 million | RPM Ventures (lead)[37] |
| November 2017 – June 2018 | Series B (two tranches) | $15.44 million total ($8.08M + $7.36M) | Existing investors including RPM Ventures; additional backers like Highland Capital Partners[62] |
| April 12, 2019 | Series C | $50 million | Undisclosed venture investors; built on prior backers[62] |
| May 2021 | Series D | $175 million | Carrick Capital Partners (lead); total capital package reached $500 million including debt[63] |
| March 2022 | Debt Financing | $300 million | Institutional lenders (details undisclosed)[64] |
| January 2023 | Debt Financing | $260 million | Barclays Corporate Banking (lead)[65] |
| January 18, 2024 | Equity + Debt | $175 million ($75M equity + $100M credit) | Carrick Capital Partners (equity lead); Citi (debt)[61][66] |
| October 24, 2024 | Debt Facility Expansion | $100 million (additional commitment) | Citi; part of $760M total facility including Barclays ($500M)[50] |
| July 2025 | Asset-Backed Securitization | $200 million | Barclays, Morgan Stanley, Citi[67] |