The Financial System Doesn’t Work for 78% of Americans — Earnin Is Fixing That

In the United States, we’re told that anyone can rise above their station through hard work. But in the richest nation on Earth, four out of every five people live paycheck to paycheck, and almost half of Americans wouldn’t be able to come up with $400 in an emergency. The financial system is standing in the way of the American dream. We shouldn’t accept that.

The financial system makes it expensive to live paycheck to paycheck — from monthly banking minimums to crippling overdraft fees to credit cards designed only for the wealthy.

There has to be a better way. That’s what Earnin is building.

It’s time for a fairer financial system

Earnin is a platform of community-supported financial products that give people the tools to take control of their financial future.

We believe it’s time for a new and fairer financial system — one in which people don’t face financial ruin because the system is rigged against them. We’re on a mission to build it, guided by a commitment to put people first and improve their financial lives, let people pay what they choose for their financial tools, and develop a community that supports each other.

The first challenge: Attacking the antiquated pay cycle

One of the most overlooked and unfair elements of our system is that people only get paid two weeks after they work. Every year, a trillion dollars of Americans’ earnings are held back in the pay cycle, even as their employers can invest it and earn interest on it, just because that’s how the system works. At best, it’s inconvenient; at worst, it leads to a cycle of debt, because there are so few options when unexpected medical bills, car repairs or school costs arise, as they inevitably do.

We need the money we work for when we need it. Every day, for example, people lose jobs because they can’t access the money they’ve earned to pay for gas to commute. Left with few choices, they miss a day of work (and a day’s pay), borrow money, skip bills and pay late fees, or buy gas anyway and take the financial hit of expensive overdraft fees. Every year, Americans spend more on overdraft fees — $34.3 billion in 2017 — than they do on fresh vegetables. Those overdraft fees, by the way, subsidize “free” banking services for more wealthy Americans, or those who can easily afford them.

This unfair system costs Americans billions of dollars and creates enormous stress and strain on tens of millions of people. And it has other hidden costs. Your kid’s birthday rarely falls on payday, so celebrations have to wait. Even new shoes have to wait. A study of over 40,000 lower-income consumers in the U.S. shows that spend on non-essential items increase right after payday.

We want to change this system by making it fairer for everyone.

Our approach: Your de facto banking app

To us, it’s simple: If you’ve earned money, it’s yours and you should be able to use it whenever, and wherever you want — it shouldn’t be held back. We’re using technology to break the rigid pay cycle to allow people to tap into their earnings when they need it most.

The heart of the Earnin platform is Cash Out, which gives you real-time visibility into your earnings and allows you to use the money you’ve made but have not yet been paid.

You simply download the app, share details about where you bank, and tell us where you work. Then, Earnin keeps track of how much you’ve earned each day. If you’d like to Cash Out, you simply choose the amount — up to $100 each day and $500 per pay period — and we’ll send your earnings straight to your bank account for immediate use. If you’d like, you can also leave a tip. But it’s not required. Then, when payday comes, we simply deduct the amount you cashed out and any tips you may have elected to provide.

Earnin can also protect you against overdrawing your bank account by alerting you if your balance is low and automatically cash out funds into your bank account. Thanks to Cash Out, our users are half as likely to overdraw their accounts as the average person.

We built a financial calendar so you can see at a glance what bills are due and how much is in your bank account. Our members may only cash out a handful of times per month, but our data shows that they open the app 25 times a month, largely to see how they’re tracking financially. We’ve become their de facto finance app.

You choose what to pay

We don’t charge people to use Earnin. We offer all our tools — both existing and new ones coming soon — without any required fees, hidden costs, or loans. Why? Because we believe everyone should have access to smart financial tools — and using them shouldn’t break the bank.

Before Earnin, most of our users turned to friends and family for financial support. The support they receive comes from a place of trust, understanding, and compassion. This ethos drives our very existence and our model.

Earnin is built on the belief that technology can level out unfairnesses and inequality, and should be able to access our products, whether they are able to pay us or not. Our community-supported model — where people pay what they choose — has led to an engaged community and a growing service.

A vast majority of our community members have tipped at least once, but sometimes people don’t tip at all. We do not pressure you, our customers, or make you feel ashamed for what you can, or cannot, pay. In five years, no one has been removed from the service for not tipping.

A lot of people think it sounds too good to be true. But it’s not. It’s simply what we think is fair, and it’s how we think we can change the system to be more helpful and uplifting. This is a radical change from the current American financial system, where draconian fees, interest, and payment terms disproportionately hold down those who can least afford it.

Our community pays it forward

Our community tells us time and again that Earnin has made their lives better, often under very trying or stressful circumstances in between pay periods.

We’ve also heard that our members want to help each other out because they understand what it’s like to grapple with hard times. That’s why we created Pay it Forward, which lets members leave a tip that supports not just our company, but other community members — if they feel so inspired.

The results have been a testament to the goodwill that blossoms inside a community when people feel seen and appreciated. So far, members have covered more than 44% of others’ tips. More than 10 million people have sent thank you notes after receiving such an unexpected kindness from a fellow community member.

“I have learned that by giving, it always comes back to you doubled,” one community member told us. “Even if your tip is small, pay it forward because it keeps all of us from paying fees and high rates when we band together as a community.”

What’s next

Our members know that for too long the system has been unfairly stacked against them, and there’s no reason it has to be like that, and there’s no reason we can’t change it. We believe we’re creating a better way. We’re standing up for fairness and letting each of us take back control of our own financial destiny.

Our community works hard every day to keep their heads above water, and we’re proud to lift them up when they need us most. And we’re just getting started. We have more plans to build community-supported products that help those who the system is not working for so stay tuned.