According to the press release, there are more than 80 million hourly workers across the country, many of whom regularly face cash flow constraints that are exacerbated by traditional biweekly and monthly pay schedules. Therefore, Square enables eligible employees using On-Demand Pay to transfer up to USD 200 of their earned wages whenever they need them, for free to Cash App – Square’s mobile payment service that allows individuals to spend, send, store, and invest money.
Some employees will also have the option to transfer their on-demand pay to a linked debit card for a 1% fee per transfer, not to exceed USD 2. There is no change to how or when the employer processes payroll when employees use this feature. Instead, Square Payroll automatically adjusts the employee’s earnings when the employer runs their next regularly scheduled payroll. Moreover, Instant Payments allows Square Payroll customers to fund their payroll using the money in their Square Balance, where sales they process via Square are stored.
By expanding the functionality of an employer’s Square Balance and enabling Sellers to select it as a payment source, Square receives confirmation of payroll funds instantly and can initiate payouts to employees immediately. Team members and contractors who have elected to be paid via Cash App receive their pay within minutes, while those paid via direct deposit get their pay as soon as the next business day.
On-Demand Pay is available in 48 states and employers can offer the feature to their employees at no additional cost. Instant Payments is available to all Square Payroll customers that have a Square Balance at no additional cost.
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