Talking about people’s finances and making life easy for employees, On-Demand pay and Autopay are terms to look into. You must have heard about both terms if you are familiar with the financials around modern work operations for employees. But knowing what they stand for takes more than just being familiar with the words. This article will help give more insight into On-Demand and Autopay.
As a worker with many ambitions, you must pay attention to your cash flow for a healthy financial life. You must be able to measure your income rate with how you spend, but even with a well-designed financial plan, sometimes some unplanned events disrupt your plans. How do you manage situations like this? What role do Autopay and On-Demand Pay play in helping your financial life? This article will teach you about Autopay and On-Demand Pay and how to differentiate them.
What is On-Demand Pay?
On-Demand Pay is a payment system adopted by employers in which their employees can request payment for the days they have worked without waiting until the end of the month to access their salaries. That is, employees get real-time access to their earned salaries.
For example, an employee who makes ₦450,000 a month in a Nigerian company might live a good financial life if he’s mindful of his spending. But in terms of emergency, maybe a situation where he needs to settle an unplanned hospital bill, his budget for that month might not allow the extra hospital bills. He needs just ₦30,000 to pay the hospital bills and has worked for 15 days. With On-Demand Pay, the employee will be calculated to have accrued ₦225,000 salary from his work days. He can access ₦112,500, 50% of the salary accrued. He can then withdraw the ₦30,000 needed for the hospital bills from this amount.
What is Autopay?
Unlike On-Demand, which is an early salary access. Autopay is also a system of payment in which a salary earner can set a schedule on how they want to be paid their earned money. The plan can be daily or weekly. That is, he can ask for a certain amount to be paid to his chosen account from his salary every day or a particular day every week.
To further explain how Autopay works. Let’s talk about the employee who makes ₦450,000 in a month. He can sign up for the Autopay feature to help him manage his spending. His plan can be to save ₦150,000 every month, use ₦150,000 to settle the essential monthly bills and use the remaining ₦150,000 to sustain him for the month. To plan this ₦150,000, he decides to divide it into the 30 days of the month. He will have ₦5,000 per day to spend. With Autopay, he can set a payment plan to pay him ₦5,000 daily for the rest of the month.
Benefits of On-Demand Pay
- Easy access to funds to tend to unexpected bills: With On-Demand Pay, you can easily access funds from your salary accrued over your work period. This allows you to attend to some critical needs and unexpected spending. You do not have to wait until the next payday to pay your bills.
- Helps to avoid high-interest loans: When faced with financial issues, people tend to seek traditional loans. Most conventional loan service providers have a high-interest rate for their services. Employees provided with the option of on-demand pay do not have to seek loans to solve their financial issues. All you have to do is request part of the salary you worked for to settle your bills.
- Improves financial stability: On-demand pay can help an employee’s financial stability. Having a pay system that guarantees flexibility will help improve your cash flow. With a healthy cash flow, you can run your finances smoothly.
Benefits of using the Autopay feature
- Helps one’s financial plans: Having a sound financial plan is a road to ensuring your financial wellness. With Autopay, one can control and schedule their spending rate to fit into a financial plan they have designed.
- Helps control one’s spending habit: Once you have already set an amount to be withdrawn for a period, be it daily or weekly, you can have controlled spending. This ensures discipline in one’s spending, and you can spend your money on essential things.
- Reduces the risk of seeking loans: When one cannot control spending, they tend to mismanage their earned money. When this happens, and they still have bills to settle, they are prone to seeking loans which can be unhealthy for their financial life. With Autopay, you can plan your finances and pay your bills easily without the pressure of seeking loans.
- Encourages Saving: Having a sound financial plan improves one’s savings habits. The autopay feature helps achieve a proper financial plan and gives a promising avenue for savings.
Finally, on-Demand Pay and Autopay are great financial tools for employees. They can be implemented to balance one’s cash flow. On-Demand Pay allows easy access to the salary accrued during your work period. Autopay helps you create a payment plan for an automatically scheduled payment. With Autopay, you can be paid a certain amount daily or weekly from your salary earnings.
To know more about these features or benefit from them, head to Earnipay for more information.