The Great Decoupling: FinTech Directly Supplying Employees’ Demands In Payments

Decentralizing payroll

FinTech increasingly meets employees' demands for faster, more flexible wage access—often outside the traditional purview of conventional payroll systems and departments. From earned wage access to early pay, payroll's center of gravity is shifting to the employee experience even as regulatory uncertainty lingers. The article coins these changing dynamics as The Great Decoupling.

A default approach to getting people paid can trace its origins to the decades immediately preceding the dawn of the industrial age. In the handful of centuries since gathering regulations, the advent of computer technology and advancements in it reinforced a long-entrenched ecosystem falling under the purview of the now-ubiquitous payroll department. By logic and necessity, two stakeholders, employer and employee, have always been the main beneficiaries of this department’s work, and most who work in payroll will say they serve both.

It is difficult, however, to serve two masters properly or equally. There is, in fact, an old adage for this. For as long as this ecosystem for payroll has been around, it has more readily served the needs of employers – whose needs are many and complex. Imperatives such as calculating pay for time, determining proper tax withholdings, and complying with always complex employment law as it pertains to getting the workforce paid come to mind. There is much more.

It is only after all these employer-centric needs are met that net disbursement to the individual employee occurs. It’s the final output, and although payroll, yes, is processed ultimately to deliver employees their pay, everything preceding the act is in service of the employer.

This should surprise no one. Whose money is this until it exchanges hands? The employer’s? And, once it enters the hands of employees, what happens to that money is not necessarily the concern of its previous owner.

But consider this process more deeply: how employees feel about their pay (e.g., its accuracy, their choice in receiving it, and more) factors heavily into their daily decision-making over whether to stay or seek employment elsewhere. And at the same time, the actual footprint of pay extends beyond the purview of payroll departments and the limits of conventional payroll technology. This, in turn, limits payroll departments’ ability to engage the workforce in ways it notices and appreciates, which is different than improving the payroll experience itself (which a majority of payroll departments report success in doing, according to “HR.com’s Future of Payroll 2025,” a report released in early 2025).

Another to Serve the Other Master

It is clear that these two masters represent two markets—each residing at the opposite ends of a transaction of money; one is the employer, and the other is the employee. For a very long time, and for understandable reasons, the work to pay employees has fallen on those doing the work of payroll. In whatever instance, this act of paying employees has been a function living within the organization or outsourced to an external entity. This is changing.

Call it The Great Decoupling. Only in the past few years has financial technology, so-named FinTech, evolved to a point that it can satisfy this market’s demand, outside the purview of conventional payroll, to supply about-to-be-paid employees with solutions catering to their preferences as a primary driver, not just as a byproduct after serving the employer’s needs. This fast-growing influence was on full display in May 2025 at PayrollOrg’s 43rd Payroll Congress. (To coincide with the event, PayrollOrg’s President-Elect Jim Medlock appeared on an episode of the HR.com podcast “Future of Payroll and Workforce Management.”)

A Mixed Bag of Regulatory Confusion and Complexity

Regulations are critical to protecting the employee’s interest when it comes to their pay. Not necessarily in protecting, but in advancing these same interests, are FinTech solutions, the supply finally available to meet individual employees’ extant demand in a complex calculus.

The cognitive dissonance in competing dynamics working toward related goals is a topic extending beyond the scope of this article to involve not only employment law but also laws governing consumer finance. That they involve these two discrete domains is spawning complexity and, arguably, confusion to slow industry efforts to put solutions into practice. 

"While technology enables instant pay to eliminate traditional paydays, complex local, state, and federal employment law reporting requirements create regulatory roadblocks that often require faster data movement among payroll stakeholders, sometimes involving human intervention,” says Brian Slowik, senior vice president of wage and corporate disbursements at Green Dot Corporation.

Another recent guest on the podcast “Future of Payroll and Workforce Management,” Slowik is also co-founder of rapid! PayCard, the solution for several well-known vendors of full-suite platforms in human capital management (HCM). “Paycards and earned wage access aim to unequivocally overcome these barriers,” he continues, “delivering compliant wage access when, where, and how employees want while adhering to Federal Banking Law, including the Truth in Lending Act. But HR and payroll professionals strive to leverage these solutions to enhance employee satisfaction without being hindered by regulatory complexities."

A popular and pervasive FinTech-facilitated disruption to the conventional cadence of payroll processing, the aforementioned earned (or early) wage access (EWA) presents a good example of the trickiness in regulating FinTech’s involvement in net disbursements of pay. In 2020, the Consumer Financial Protection Bureau (CFPB) issued an advisory opinion stating that certain EWA products were not considered credit under Regulation Z. It would require yet another article to delve into the origins of and rationale behind Regulation Z. Established in 1969, Regulation Z was created to implement and enforce the Truth in Lending Act (TILA) of 1968. Suffice it to say that the CFPB, created in 2011, took over responsibility for Regulation Z that year.

Returning its thinking to the EWA, the CFPB issued a proposed interpretive rule in 2024 suggesting that certain EWA products could indeed be considered credit under the TILA. Concurrent to this development was the introduction of H.R.7428, the Earned Wage Access Consumer Protection Act, in February of 2024. The law has yet to advance to a vote. Meanwhile, fast forward another half year to January 2025. This is when the CFPB rescinded its aforementioned 2020 advisory opinion. To add grist to the mill, the incoming Trump Administration has come a potentially large reduction in the CFPB’s workforce and an attendant withdrawal from a large percentage of its enforcement engagements.
 

Beyond EWA

In other words, as the regulatory landscape evolves at the intersection of payroll and consumer finance, regulatory guidance has grown unclear and the evolution of related law—uneven. For now, its relationship to novel approaches to when and how employees receive their pay is a mixed bag. Meanwhile, EWA is just one of many disruptions to conventional payday cadences. Another so-called “early pay” may swiftly render EWA a relic and further the outcome of FinTech’s impact on net pay disbursements as a net positive on employees’ financial wellness.

“‘Early Pay' has emerged as a major selling point for banks, allowing employees access to their funds up to two days before the official payday,” says Karen Settembrino, product director, human capital management, at Alithya (and another past guest on the “Future of Payroll and Workforce Management” podcast). “Giving employees early access reduces the need for EWA and for payday loans and will only increase as more banks offer early access. This shift has left employers scrambling to adapt to the new landscape, as employees frequently inquire about the availability of their wages, or funds not available when reversal of transactions that should not have occurred.”

Promoting Financial Wellness

This two-days-before-usual-payday timeframe holds significance. It is when 56 percent of employees paid biweekly tend to find themselves short on money, according to a survey conducted in early 2024 by OnePoll for the Financial Technology Association. Various findings from a survey by Instant Financial, another FinTech player in the space, are corroborating. The related report, “Wages & Wellbeing,” shares that 49 percent of wage and hourly U.S. workers are frequently short on money ahead of payday. The same report also finds that 72 percent of workers think employers should offer same-day access to pay and that 86 percent want to be paid the same day they work.

And employers are learning—it pays to pay attention to employees’ preferences when it comes to pay. In a 2025 white paper published by the World Economic Forum (WEF) and titled "Thriving Workplaces: How Employers can Improve Productivity and Change Lives,” the organization underscores the significance of payroll systems in enhancing employee health and well-being. The report suggests that optimized payroll processes can lead to improved financial security for employees, which in turn boosts productivity and overall organizational performance. Furthermore, the WEF’s “Future of Jobs Report 2025” discusses the importance of flexible compensation structures and timely wage access as tools to attract and retain talent in a rapidly changing labor market.

FinTech: Expanding the Concept of What Comprised a Payroll Ecosystem

"Financial wellness begins with access,” says Tal Clark, CEO of Instant, “and the traditional payroll cycle has limited access by extending the time between pay. Over time, U.S. employees have been moved from receiving their earned wages daily to weekly, bi-weekly, and now, in some cases, even monthly. FinTech companies have emerged, delivering technology to ensure access improves, allowing employees the opportunity to access their pay whenever they choose, whether it's each day, every other day, or on their traditional payday."

The factor driving The Great Decoupling, FinTech solutions offer flexible disbursement to complement existing ecosystems for payroll in ways these conventional systems would not otherwise be able to improve. Most critically, the trend embodies a democratization of access to consumer-like financial tools for employees vis-a-vis their net pay immediately when they receive it. Where once only banks could intermediate payments or payroll processing, now any tech-enabled platform with the right partnerships and compliance framework can do so.
 

Brent Skinner is Executive Community Leader for Future of Payroll at HR.com. Over the span of his nearly 20-year career in human capital management (HCM), he has helped executives with their thought leadership, partnered with sales, marketing, and customer success, and seen his commentary published across the trade press. An industry analyst several times in HCM, he has also been on the vendor side multiple times.