Stewart A. Stockdale, co-founder of Rellevate and its chairman and CEO, said it differs from other early wage access companies in the comprehensive services it offers. It provides an account that pays interest, a Visa debit card, electronic bill pay and a send money feature which now works domestically but will offer international money transfers at attractive rates later in the year. It also offers surcharge-free cash access with customers’ Visa debit card through Cardtronics’ Allpoint ATM network. It will add expedited bill pay in the fourth quarter to help customers who face a shutoff of utilities if they don’t pay a bill immediately.
“We have been building this for 18 months,” said Stockdale. “It requires pretty complex integration.” Users can access it through a computer or a smartphone.
Stockdale has extensive experience in senior roles in financial services firms. Most recently, he served as CEO of The J.G. Wentworth Company. a diversified consumer financial services company specializing in mortgages, structured settlements, payment systems, and personal loan options. Previously he was president at Western Union and ran its money transfer and consumer payments businesses across five global regions.
“I have worked in and around middle America for a while and thought there is a huge opportunity to change the paradigm and offer the right services at a really fair value,” he said.
Firms serving the lower end of the market have charged their customers a lot, he added. A Rellevate account will cost its owner $9.95 a month for up to four pay advances. To offer advances on payroll earnings it needs access to the employer’s records of an individual’s time worked and wage rate.
“When people need the money, since I know you worked those hours and will get paid in two weeks, I will advance you 50% today. Every day I tell you how many hours you accumulated and make 50% of it available. If you want it in your checking account, okay. Or if you are at a grocery store checkout and get an NSF notice, we can transfer the money to you immediately.”
The company maintains a warehouse line at Sutton Bank, an Ohio-based community bank which is invested in payments as a core product.
“They are entrepreneurial and innovative and they understand how to build these programs,” said Stockdale. “They understand our vision and the moving parts and were willing to take on the complexity of all these integrations, fund flows and the compliance,” he added.
“When an employee takes $50, that goes out of the warehouse to the consumer’s account. Then at payroll time the payment goes into the Rellevate account and we take it back. We charge no interest and no fee. The risk ends up being if the company goes out of business and can’t pay their employees; we carry that risk.”
The system of record for its Pay Any-Day service runs on Technisys, a Latin American firm which is making inroads into North American with its banking technology.
“They have been great, a phenomenal partner,” said Stockdale. “They understand what we are trying to build.” Rellevate will use Payveris for Bill Pay.
Employers see advance pay providers as a tool to help employees who may come up short when faced with unexpected bills and sometimes borrow directly from their employer.
Stockdale talked to a fast food company which has 125% turnover and figures it costs $2,000 to attract an employee.
“They saw this as helping to attract employees and improving retention, a really good benefit.” He’d just talked to staff at two midtown Manhattan hotels. They pay $10 to $25 monthly for their bank accounts, and $35 when they bounce a check. Rellevate provides immediate money when they need it.