How Wagestream is helping workers achieve financial well-being with an embedded banking strategy
Wagestream, a charity-backed company aiming to increase financial well-being for millions of workers by helping them manage their earnings and build up savings, is looking to expand into the U.S. With a huge workforce underserved by existing financial services, the U.S. market quickly became an opportunity for the European based company. To grow into this new market, Wagestream turned to banking as a service (BaaS) provider Treasury Prime as a partner, using its cutting-edge technology and APIs that link fintechs to banks.
An ample savings account is not only a lifeline when job loss, illness, or other problems strike—but also has a significant impact on day-to-day mental health. Yet more than one-third of American households did not save for emergencies in 2019, according to the FDIC's most recent "How America Banks" survey.
Wagestream wants to change that. Provided through an employer, Wagestream's embedded banking platform gives employees a set of features for budgeting, saving, and financial education—all built around a fairer, more flexible pay cycle known as Earned Wage Access (EWA).
"Through our early growth in Europe and guidance from charity investors, we learned quickly that savings and financial literacy are core pillars of financial health—and that flexible pay will always have a more profound impact if offered alongside them," said Wagestream's United States general manager Justin Raimo.
Wagestream has been growing rapidly since launching in the United Kingdom three years ago. It now works with more than 200 employers in the U.K., U.S., Spain, and Australia, to serve more than half a million employees in sectors like hospitality, healthcare, and retail. When it came to finding a comparable banking as a service partner in the U.S., Treasury Prime—whose developer team has decades of experience in the BaaS industry—seemed like the best fit.
"The main factor that led us to Treasury Prime was that we knew that they could move quickly and reliably—and that its partner Piermont Bank was similarly able to work quickly while still reassuring us that users would be benefiting from secure, world-class technology," said Wagestream Director of Data and Integrations Jingbo Huang.
"Treasury Prime has the most mature BaaS platform and product offering for fintechs in the country. If you're serious about doing this quickly and correctly, we are the people you should trust," said Chris Dean, CEO of Treasury Prime.
Building well-being around savings, fast
In the U.S., Wagestream was bringing its unique product to an active market—which meant that a robust service with savings built-in would be key to successful expansion.
Employees with Wagestream can opt into a "Save the Pennies" feature that rounds paychecks down to the nearest dollar and transfers the change to savings. That way employees instantly build savings through direct contributions from their paycheck.
To offer the savings feature, the company needed architecture in place to instantly, securely process those savings for users—which is where Treasury Prime comes in. Raimo and Huang highlighted three factors that enabled them to work quickly with their BaaS partner.
1. Full integration with bank partner
Treasury Prime is fully integrated with its bank partners—something Huang said has not been the default practice of providers Wagestream has worked with before.
"A lot of times an API provider isn't necessarily that well connected with its banking partner," he said. That meant Wagestream had to go back and forth, scheduling separate meetings with the BaaS provider and the partner bank.
During onboarding with Treasury Prime, communication was integrated. "We would have weekly meetings where we would have not only technical resources directly from Treasury Prime but also a representative from the bank to answer questions. This was an important part of working together; financial health and processing savings is not a small thing, and we need to make sure every single detail is right so that employers and employees are protected" he said.
2. Lightning-fast due diligence
Treasury Prime's close integration with partner banks means clients can move through tedious compliance processes faster, especially when it comes to due diligence.
"You typically have to get all the due diligence done with the bank, and then go back to your technology provider just to repeat the same process and figure out whether their technology is going to support you in the way you need," said Raimo.
With Treasury Prime, there's no need for a constant back-and-forth between the BaaS provider and bank. Instead, Wagestream can go through a streamlined process where all parties work together.
"Treasury Prime and the bank partner allowed us to get through a quick, clear due diligence process of about a month," said Raimo.
With other providers, the process could have taken Wagestream between three and six months, he said.
3. Modern, fully automated API
Treasury Prime's "new, clean APIs are modern and easy to work with, which definitely helped make things go faster," said Huang. He said other providers often rely on APIs originally built in the 90s, with minimal updates.
Treasury Prime's speed has helped not only with laying the foundations for Wagestream's U.S. business but given it the potential to rapidly scale and support more workers in the future.
"All the technology is there to enable us to automate everything through just customer interactions," said Huang. "We don't need any sort of staff on our end to manually get involved with KYC, for example. Our mission is to help millions of workers with their financial help—so anything like that which enables us to scale reliably is hugely valuable."
Inclusion in action
While flexible, frequent pay is an old idea, providing it through earned wage access technology has only been around for about a decade. Yet, the benefit has quickly become table stakes for employers in the U.S., said Raimo—with many employers now either putting a financial wellbeing policy in place or expanding an existing one.
With a growing number of companies offering Earned Wage Access – including major employers like Walmart, McDonald's, and the U.K.'s National Health Service (NHS) – millions of workers in the U.S. and U.K. are estimated to now have EWA, according to Wagestream. The company said it expects most large businesses to have a financial wellbeing program featuring EWA in place by 2030.
Those that enroll stand to benefit. Among those using Wagestream, 77% feel less stressed, 72% feel more in control of their money, and a large proportion find planning and saving money easier. That's according to a recent impact assessment from Wagestream and impact partners 60 Decibels and Big Society Capital.
"With 9 in 10 workers saying they prefer flexible pay, and the data now showing it has a positive impact for both employers and employees when offered responsibly as part of a wellbeing service, it's only a matter of time before most employers have something like this in place," said Raimo.