How Modulr is helping Wagestream bring financial wellbeing to frontline workers

Wagestream – the financial wellbeing app founded with charities, designed for frontline workers and built around pay – aims to make work inclusive and rewarding for millions of employees.

Workers use Wagestream to choose their own pay cycle, manage their budgeting, save for a rainy day, chat to a personal money coach, and get fairer deals on financial products – all in one app, with minimal change to payroll.

Here, we look at how Wagestream is helping businesses solve their people challenges and transform the lives of their employees, powered by Modulr.

Why it’s needed: financial services that give and don’t take

Providing a charity-backed app now available to over one million people, Wagestream is on a mission to make work and money more inclusive, fair and rewarding.

“Frontline workers pay significantly more for financial services and this can contribute to poor financial wellbeing,” explains Nick Rogers, VP of Engineering at Wagestream. “We hope to eradicate the extra costs frontline workers pay by giving people access to financial services built around flexible pay, which means accessing their income at times throughout the month that suit their needs.”

Wagestream aims to help employers build long term financial resilience by offering a unique set of financial tools, accessible to all.

“Our view is that there’s lots of companies focused on building financial superapps, but there’s very few that are really focused on the frontline worker. The financial services space comprises of a whole host of different products, from credit and insurance, to savings and investment. We asked ourselves, how can we rebuild these products in a way that is designed specifically for this underserved market and then effectively deliver them, one-by-one, as a compelling value proposition – to create a comprehensive offering across the space.”

In addressing the financial needs of the frontline worker both now and in the longer term, Wagestream knew that it needed a partner who could optimise payments at scale, unconstrained by the manual processes and legacy infrastructure​ of the traditional banking system. One that offered market leading capabilities and unrivalled uptime, reliability and availability, and could facilitate payments into any UK account, and fast.

It’s a search that brought Wagestream to Modulr.

“Modulr has a mature service offering and some really high-calibre, top-tier UK FinTechs as its clients. And that’s one of the key things that differentiates it from the competition,” adds Nick.

What it is: pay cycles that work for long-term financial health

Wagestream’s financial wellbeing app is built around flexible pay, also known as earned wage access – this allows employers to give their employees access to their earned pay throughout the month, so they can establish a pay cycle that works for their long-term financial health.

Flexible pay simply means ; the funds available are a portion of what the employee has actually earned to date – with no interest ever paid on the funds accessed.

Modulr provides the underlying account infrastructure that underpins Wagestream’s flexible pay proposition so that employees at organisations that offer Wagestream can use the Wagestream app to access their pay when they choose. In order for employees to be able to access their earned wages, an account is created on behalf of the employing company which becomes the source of funds for any transfers its employees choose to make throughout the pay period. Modulr also provides the ability to create individual accounts for all enrolled Wagestream users who have their net pay sent directly to this account, on their regularly scheduled pay date.

When employees access their pay flexibly, the Modulr platform transfers out a percentage of their earned wages direct to the employee. On pay day, Modulr then automatically deducts any flexible payments made throughout the month and associated fees, before transferring the remainder of the salary into the employee’s personal bank account, as usual. This automated process takes a matter of seconds, thanks to Modulr’s direct participation into the UK Faster Payments scheme.

And all while having minimal impact on the employing company’s payroll processes.

“Flexible pay is built upon the premise of being able to send people money quickly. And so being able to use a payment service provider like Modulr is invaluable. Our service offering just couldn’t exist without it. Modulr has a set of APIs that we can integrate with incredibly quickly and easily to send payments to any bank account in the UK, in a matter of seconds.” says Nick.

How it works: a supercharged salary solution

Thanks to flexible pay, employees with fluctuating earnings now have access to their pay as they earn it, making both cashflow and longer-term financial planning much easier.

“We very much believe that flexible pay will become the standard going forward,” says Nick. “It’s just a question of when. Not only does it have a massive impact on financial wellbeing, it’s also a highly effective tool in the recruitment and retention of staff, as well as on staff productivity. The idea that you work for a day and then have to wait 30 days for your employer to pay you for that will become increasingly strange. Our mission is to make sure that happens as quickly as possible.”

So, what’s next for Wagestream and Modulr?

“We look to pick really high calibre partners that we believe in, and then go on a journey with them, utilising more and more of their existing capabilities but also working together to develop new functionalities so that we can deliver even more value to our customers.”

And it’s a journey that’s going to take them further into the Eurozone, with Wagestream set to leverage Modulr’s growing European capability. Both companies share a commitment to the end-customer experience and requirements, for example the need for local IBANs -something that’s important for both flexible pay for employees and for the employers’ ability to make payments. This is in addition to SEPA Instant, the European-wide faster payments scheme.

“All in all, it’s a reliably predictable partnership,” concludes Nick.