Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly • Hacker News Board

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#71

Post by wutbrodo » Thu, Jul 22, 2021, 5:21 PM UTC

RhysU wrote: post #66

wutbrodo wrote: post #50

Earlier quoted context omitted.

This doesn't make much sense. The counterfactual is that they'd be desperate to eat and take out a sky-high APR short-term loan. How is the new ability to take zero-interest loans "creating" the snowballing effect instead of reducing an already-existing one? This is called "the Copenhagen interpretation of ethics", in which any interaction with a situation in an attempt to improve it somehow gets warped into shoulder…

The payday loan puts backpressure on using it because it is obvious that the person is paying to use it. A zero interest loan does not communicate to the user that they are reducing their optionality until they are stuck.

This feels like quite a reach.

Understanding that you've received X pesos now and will receive X less in two weeks is a lot simpler than implicitly calculating the NPV/default risk of high-interest loans, both from an intuitive and an explicit budgetary perspective.

Even if we (incorrectly imo) assume this dynamic plays out the way you say it does, it's quite a bold claim to say that this putative psychological effect comes close to outweighing a 3000% (or w/e) reduction in APR.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#72

Post by gotostatement » Thu, Jul 22, 2021, 5:23 PM UTC

SimonPStevens wrote: post #58

This still seems no different from giving the employee a payday loan (admittedly at zero percent interest). It's not going to solve anything because they are just taking money early that they will need next month. It might seem attractive initially, but within a few months the status quo will have reset and those employees who were living paycheck to paycheck will still be living paycheck to paycheck, just now it wil…

> It might seem attractive initially, but within a few months the status quo will have reset and those employees who were living paycheck to paycheck will still be living paycheck to paycheck, just now it will be day by day waiting for their accrued amount to increase.

Except now they have money available to them in realtime, continuously according to the work they've put in, without having to wait for discrete points in time where their bank account refills.

> This unexpected expenses thing sounds like poor justification to me.

The fact that people use it shows people want it. The paternalism towards people who don't have enough money is really staggering. This line of argumentation reeks of "Poor people cant manage their finances - they dont know whats good to them"

> And charging the company Vs the employee is no different. If you didn't charge the company they could instead increase the wages of their staff by the equivalent amount. You are just taking money out of the potential pot that goes to the staff. Staff costs is just a single line on our summary p&l which includes salaries and benefits.

Salaries have other pressures maintaining them besides available funds for salary, like minimum wage and market rates. As we have known for years based on the utter failure of "trickle-down economics", salaries paid and available funds often have little to do with one-another.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#73

Post by sigstoat » Thu, Jul 22, 2021, 5:37 PM UTC

scarby2 wrote: post #53

seahawks78 wrote: post #51

Earlier quoted context omitted.

We need universal basic income (UBI)! Period. I believe that in a country like US every working adult (18 - 64) should get a minimum of 5k a month for paying basic expenses. Furthermore, Payflow should be integrated with the government UBI program so that anyone can withdraw money against it similar to what is being done now. This will go a long way in solving the Payday problems/worker exploitation issues as mention…

You have to be very careful with ubi (which I'm a huge fan of btw.), it could cause hyperinflation, probably would at $5k a month, because we have a pretty severe housing shortage there's going to be a whole bunch of people with an extra $5k that they could spend on housing so average rent may rise significantly. Instead of jumping to straight UBI we need to build an abundance of housing that is of good quality, affo…

> Instead of jumping to straight UBI we need to build an abundance of housing that is of good quality, affordable to build, is operated by the state

since you're willing to take incremental steps, perhaps we could have the state stop preventing cheap housing from existing, first.

it's not even legal to rent out decent, clean, individual rooms in many places.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#74

Post by sneak » Thu, Jul 22, 2021, 5:42 PM UTC

potamic wrote: post #47

qnsi wrote: post #30

I worked at a company that was working on this. I left because of ethical reasons. >Workers living from pay check to pay check have traditionally been vulnerable to exploitation And the proposed solution doesn't fix that. Most of those people don't have a problem with unexpected expense once a year. They don't budget and are short on cash every month. So now imagine Bob needs money halfway through the month. He takes…

I have a cynical view of how this product is going to turn out. Instant, easy access to wages is going to form habits in users to live on a day-to-day basis instead of budgeting for a month. With no headroom they will be that much more desperate in an emergency and that's the time to attack them with loans. The end game is always loans. That's the only way to make money in finance.

Well, unless we abolish individual p2p moneylending, SOMEONE is going to loan them money.

Providing more competitive and safe and professional options can only help, it can't make an already-bad situation worse.

The only situation worse than having to take a payday loan is not being able to shop for a decent vendor who isn't trying to screw you.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#75

Post by UncleMeat » Thu, Jul 22, 2021, 6:20 PM UTC

qnsi wrote: post #30

I worked at a company that was working on this. I left because of ethical reasons. >Workers living from pay check to pay check have traditionally been vulnerable to exploitation And the proposed solution doesn't fix that. Most of those people don't have a problem with unexpected expense once a year. They don't budget and are short on cash every month. So now imagine Bob needs money halfway through the month. He takes…

I don't buy this criticism. Suppose we were instead paid our salary annually as a lump sum at the end of the year and we were fighting for biweekly pay days. The same argument could be made! What if people misuse the money! The delay helps them budget!

The two week (or so) delay between hours worked and money being deposited in your bank account is a free loan from you to your employer. That's wrong. People should be free to access their earned income as soon as they earn it.

I do agree that this sort of product can easily become a payday loan system with terrible rates, but streaming your wages as you make them sounds like a pure good.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#76

Post by seahawks78 » Thu, Jul 22, 2021, 6:29 PM UTC

gruez wrote: post #63

seahawks78 wrote: post #57

Earlier quoted context omitted.

I don't think it is especially if you are living in one of metro regions/tech hubs i.e. SF Bay area, Seattle, NYC etc.

The number itself as it pertains to cost of living isn't ridiculous, but the implied policy proposal of "let's give everyone $5000 so people in high CoL areas can cover their basic expenses!" is ridiculous. The #1 cause of high CoL in those areas is because it's a desirable place to live and there are more people who want to live there than there are housing units, so people bid up the price. Giving everyone $5000 wo…

No I didn't mean blanket 5k to everyone. It could very well be dependent on the place you live. 1k - 5k might be an acceptable range. If you live in NYC you get more, rural Alabama may be not so much. But you get the idea.

Assuming that not everyone can be successful in life (in spite of having boatloads of IQ + work ethic) UBI might be one of the few ways left to reduce generational in-equality. Don't get me wrong - I am no fan of socialism/communism and I understand the problems that come with a collectivist mindset. But I am also practical. I certainly don't want to live in a dystopia where a select few "masters of the universe" type rule over vast swathe of humanity.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#77

Post by asukhwani » Thu, Jul 22, 2021, 6:59 PM UTC

Grustaf wrote: post #60

asukhwani wrote: post #43

Earlier quoted context omitted.

Our average user in Spain withdraws 50$, but their monthly salary is >1,000$. We also regularly survey users to see chat reasons they make withdrawals for. Our conclusion is users are taking small portions of their salary to cover unexpected expenses. Users tell us they love this, because otherwise they would have had to ask a friend for money.

In that case, wouldn’t the real solution to their plight be to learn to save money? I know that is part of your offering, but your main product contradicts it completely, doesn’t it? Easy borrowing does not seem to promote saving.

Indeed! That's why we released a second feature called "Saveflow". It allows employees to take a fraction of their payslip and put it into a virtual piggy bank. We just launched it but utilisation is great!

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#78

Post by RhysU » Thu, Jul 22, 2021, 7:08 PM UTC

wutbrodo wrote: post #71

RhysU wrote: post #66

Earlier quoted context omitted.

The payday loan puts backpressure on using it because it is obvious that the person is paying to use it. A zero interest loan does not communicate to the user that they are reducing their optionality until they are stuck.

This feels like quite a reach. Understanding that you've received X pesos now and will receive X less in two weeks is a lot simpler than implicitly calculating the NPV/default risk of high-interest loans, both from an intuitive and an explicit budgetary perspective. Even if we (incorrectly imo) assume this dynamic plays out the way you say it does, it's quite a bold claim to say that this putative psychological effec…

No one needs to compute NPV anything. It's not that complicated.

All you have to do to get backpressure is to see that spending X pesos now means that you have less than X pesos in two weeks. Because, fees and interest.

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#79

Post by sergiomattei » Thu, Jul 22, 2021, 7:36 PM UTC

nathancahill wrote: post #10

andrewingram wrote: post #8

It's a great problem to solve, and killing the payday loan industry is a good thing to do. Out of curiosity, why is the app UI and feature set practically identical to Wagestream (I worked there last year, so i'm pretty familiar with it)?

Wow, you aren't kidding. Even the copy on the landing page is a Spanish translation of Wagestream's landing page.

Oh, that's why the copy read so weird!

As a native Spanish speaker, the text read awkwardly. I chalked it up to regional differences (LatAm v. Spain) but this explains a lot..

Re: Launch HN: Payflow (YC S21) – Allow workers to access their wages instantly

#80

Post by wutbrodo » Thu, Jul 22, 2021, 8:32 PM UTC

RhysU wrote: post #78

wutbrodo wrote: post #71

Earlier quoted context omitted.

This feels like quite a reach. Understanding that you've received X pesos now and will receive X less in two weeks is a lot simpler than implicitly calculating the NPV/default risk of high-interest loans, both from an intuitive and an explicit budgetary perspective. Even if we (incorrectly imo) assume this dynamic plays out the way you say it does, it's quite a bold claim to say that this putative psychological effec…

No one needs to compute NPV anything. It's not that complicated. All you have to do to get backpressure is to see that spending X pesos now means that you have less than X pesos in two weeks. Because, fees and interest.

You said that owing interest somehow implies "backpressure" in a way that zero interest loans don't. But the phenomenon you describe in this follow-up comment applies just as clearly to zero-interest loans: spending X pesos now means you forfeit X pesos later. The only difference is that, with non-zero-interest loans, you forfeit (X+I) pesos later, which requires an implicit calculation of whether time-shifting your spending is worth losing _I_ pesos.