Employers Extend Payroll Benefits to Cheaper Financial Services for Workers

With more and more companies hiring remotely and employing workers located in areas under different local laws and anti-money laundering regulations, processing international payroll payments has become more complex in recent years.

This has made the role of last-mile partners critical, according to Eynat Guez, CEO at Israel-based cross-border payroll management firm Papaya Global, pointing to the company’s recent partnership with JPMorgan.

Announced in October, the deal gives Papaya access to the bank’s global financial infrastructure and payments network, which the firm is leveraging to deliver compliant and secure payroll payments through a single end-to-end platform in 72 hours across 150-plus countries worldwide.

Read more: Papaya Global to Acquire Cross-Border Payments Service Azimo

As Guez told PYMNTS: “Our clients and everyone that uses Papaya are assured that once they’re processing payroll with us, their employees are going to be paid correctly and on time in any country around the world.”

When it comes to payments in multiple currencies, she said the ability to pay an employee’s preferred currency of choice has been challenged by regulation in most parts of the world which requires salary payments to be paid in local currencies.

Read also: Papaya Global Raises $250M Toward Onboarding, Cross-Border Pay

Overall, however, Guez’s view is that currency is going to be the new “world order” in payroll payments, with more individuals capitalizing on double-digit currency fluctuations to make substantial income without much effort involved.

Crypto: New Payroll Option?

Whether it’s delivering payments to local bank accounts, to digital wallets such as PayPal or even paying directly in digital assets, there is an increasing demand for payment flexibility around the world from international-based workers.

For those in countries with highly volatile markets or in places with liquidity issues like Ukraine and Russia, Guez said demand for quick and low-cost payments in cryptocurrency has surged over time.

Learn more: Deel CEO: Crypto Gives Employers New Payroll Option to Attract Global Workforce

But while employees are increasingly embracing the possibility of having some of their savings invested in virtual assets, she highlighted certain concerns, particularly the fact that digital currencies are still not assets that can be liquidated often or traded on a day-to-day basis to buy groceries, for example.

Increasing regulation in the space has not helped either, adding further complexity to crypto payments associated with payroll, she also noted.

“About two to three years ago it was much easier because governments [were still behind in catching on to the trend], but all of a sudden [that has changed],” she said, adding that apart from the U.S., which has made it relatively easy to be paid in crypto, most countries have made it very hard for employees to hold crypto.

Extending Payroll Benefits

The world of employment has no doubt changed in the last few years, paving the way towards sustained remote working and hybrid work for most companies.

Trends such as pay on demand have also gained traction, as more and more workers seek access to their wages before the end of the government-regulated monthly payment cycle commonly used in most parts of the world.

“There is almost no logical reason why [employees] shouldn’t get paid early if they stay [on the job] and work for the whole month,” Guez remarked.

She added that early access to wages is even more critical in this current high interest rate macroeconomic environment to prevent workers from relying on predatory payday loans to make ends meet.

See also: Avoiding The Missteps Of International Payroll

Against this backdrop, she said employers will play a greater role in initiating short- and long-term loans rather than banks, using balance sheet liabilities such as paid time off (PTO) or severance payments that are not linked to salary payments.

With these cheaper financial services and payroll benefits, employees who need access to funds that go above their paycheck, to buy a vehicle or cover wedding expenses, for example, can turn to their employers to fill that financial gap.

It’s an area where global payroll providers like Papaya, which have access to massive amounts of employee data, can also come in handy.

“We are able to estimate [employee] risk exactly as the bank would and also have full visibility over the liabilities that an employer has on the balance sheet — so why can’t we create a place where those needs are met?” Guez argued.

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