The founder and ceo of Advanta, Martin Fortelný, became a regular contributor to the Fintree.cz website. As a pioneer of HR-fintech, he will focus on news and opinions from this new industry. In his first article, he wrote about the reasons why payouts become the norm more often than just once a month.
Send money across the globe instantly? No problem. Invest in securities or real estate? Ready in a few loops. Exchange money? Toy. Get to your paycheck? Wait until the "fifteenth".
In many ways, Fintech has grown so much into our lives that we take it as the norm. A lot of operations that we used to have to wait for or have a complicated way to arrange happen immediately thanks to technology. This benefits both users, companies and the economy. Advanto has the same criteria, according to which it should be normal nowadays to get to the wage worked whenever I need it.
It is almost unbelievable that in the case of wages, employees are still largely locked into the monthly cycle of income and expenses. It doesn't have to be that way at all. It shouldn't even be. Thanks to fintech, "Payout at any time" is perfectly feasible without any claims to the employer and brings a number of positives to everyone. This is nothing new – payouts more often than once a month are a trend in many Western economies. Even in our country, this is not a complete novelty – on the contrary, we can understand it as a return to the successful era of the First Republic, when payout was the norm several times a month, for example, in Baťa's shoe factories.
He probably knew that if he paid the paid reward more often, he would eliminate the so-called millionaire's payday phenomenon – the habit of squandering his freshly earned paycheck more. Today, we know that most people who receive money once a month disappear from their paycheck after about a week. About two weeks before payday, people are getting to a critical point where any unexpected expense of more than about 10,000 can get into a merry-go-round of loans and debt traps. This is not just for low-income groups. The payday millionaire is a phenomenon described even among people with above-average incomes. In such a situation, a gradually drawn payout and a more even distribution of income appear to be an alternative that could prevent such situations.
It is clear that it would be best for everyone to educate themselves responsibly in finance and also behave accordingly. On the other hand, we know from all the surveys and practical experience that theoretical education does not work so well. Advanto takes the approach that financial products must be safe on their own and motivate people to behave financially correctly through their design. And it succeeds. People who use Advanto choose part of their paycheck very judiciously and responsibly.
Advanto has more ambition than to make "payout at any time" the norm. He wants to go further in helping and protecting employees from financial instability, and in the near future plans is to add automated savings that will help people create a financial cushion for unexpected situations.
And what do employers get out of it? Not only is it a handy benefit for their workers to save them stress, but Advanto gives employers an overview of how employees are getting along with their money. And such information can be very helpful before people, who are now in a pitiful shortage, do not leave for better offers.
Article published on: Fintree.cz
