WageBeam: Payroll rethought

Vision

Wagebeam

With WageBeam, we want to rethink payroll for the German market. We want to provide employees with a flexible system that allows them to access their current and future salary at any time. We also want to support employees in making better financial decisions with content on the topic of financial education. In doing so, we are picking up on the “earned wage access” trend that is already widespread in the US and the UK. There are several start-ups there that offer this type of product and have been able to raise millions from investors.

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Problem and Background

72 percent of people experience financial stress at least once a year. 20 percent of employees even change jobs as a result. If you add this up, it adds up to around $300 billion in lost economic output.

Validation

As a first step, we wanted to understand whether flexible salary payments are in demand in the German market. To this end, we conducted a representative survey of 530 employees aged between 18 and 65. The response was clearly positive: among other things, 57.7% of those surveyed had felt the need to access their salary in advance at least once in the last 12 months. 60.2 percent stated that such an offer would influence their choice of future employer.

Legal and regulatory challenges

We then asked ourselves to what extent such a solution could even be implemented in Germany. After all, it has been almost impossible to find such a service on the German market to date. Our research and discussions with experts have shown that it is: From a tax and labor law perspective, there are no points that speak against such a solution.

Technical implementation

This raised the question for us of how difficult the implementation of such a solution would be for (large) companies. The exchange with Commerzbank and providers such as DATEV quickly revealed that the implementation is not easy, but definitely feasible. We are currently in the process of developing the interface to the DATEV system and want to validate the functionality with “real” business customers in the near future.