Netchex Offers 'Buy Now Pay Later' Employee Benefit
HR technology company Netchex has partnered with BenefitsMe to launch a "Buy Now Pay Later" option as a cost-free benefit for hourly employees. The tool is aimed at helping frontline workers manage unexpected expenses. The companies position the offering as a tool to improve employee recruitment, retention, and productivity.
The "Buy Now, Pay Later" (BNPL) model functions as a point-of-sale installment loan, allowing employees to purchase items and pay for them over time through interest-free payroll deductions. This differs from Earned Wage Access (EWA), which lets employees access wages they have already earned before their scheduled payday. Financial stress is a significant drain on workplace productivity, with some estimates suggesting employers lose up to $250 billion annually in the U.S. due to employees being distracted by personal financial concerns. More than half of U.S. workers report that their financial health negatively impacts their productivity, with 51% living paycheck to paycheck. The BenefitsMe program integrated into Netchex's platform is offered at no cost to the employer and does not involve credit checks. Employees can purchase from a marketplace of over 70,000 brand-name products, and the repayments are automatically deducted from their paychecks over a set period. Covington, Louisiana-based Netchex was founded in 2003 and provides cloud-based human capital management (HCM) and payroll software to over 7,500 businesses. In June 2023, the company was acquired by private equity firm GrowthCurve Capital, a move intended to accelerate its AI strategy and expansion. While BNPL can make it easier to manage large or unexpected expenses, some research suggests it can also lead to overspending. A study found that nearly one-third of BNPL users spent more than they would have otherwise, and the ease of use can create a disconnect from the financial reality of the purchase. The adoption of financial wellness tools is a growing trend in employee benefits. 84% of employers believe that offering such tools can help reduce employee attrition. Offerings like BNPL and EWA are positioned as modern benefits that support employees' real-world financial needs, thereby increasing loyalty and reducing turnover.
