Will Instant Pay work with my bank?

Instant Pay is a slick feature from KOHO that lets hard-working Canadians just like you get access to up to 50% of the wages that they’ve already earned at the end of each work day.

This means that employees who use Instant Pay no longer have to wait weeks or even months to receive their paycheque on payday. Rather, with Instant Pay you can cash out part of your paycheque as soon as you clock out of work each day.

But while Instant Pay sounds super cool (we’re not biased or anything), it’s understandable if you’re a bit apprehensive about the whole thing.

We get it – the thought of receiving early access to your pay might sound too good to be true. So you might be wondering, what’s the catch? Perhaps more importantly, will Instant Pay even work with my bank?

Up next, we’ll take a deep dive into all things Instant Pay and hopefully clear up some of the questions you have about this awesome program. We’ll discuss what it is, how it works, and whether or not it’ll let you receive funds into your current bank account. That way, you can decide if Instant Pay is a good choice for your financial life.

What is Instant Pay?

Instant Pay is a type of earned wage access (EWA) program that’s offered by KOHO.

The idea behind Instant Pay is that it lets you get earlier access to some of the wages you’ve already earned throughout the workweek. In other words, instead of making you wait for your weekly, biweekly, or monthly paycheque, Instant Pay lets you withdraw up to 50% of the pay you’ve already earned before payday.

How does Instant Pay work?

We know what you’re thinking: early access to my paycheque? No way! That can’t be possible. How would that even work?

Although it might sound like some sort of new-age tech, the systems behind Instant Pay really aren’t that complex.

Basically, Instant Pay integrates into your employer’s current payroll systems. If you’re signed up for the program, for every day that you work, your employer will report how many hours you’ve completed and how much you’ve earned for those hours to KOHO. The team at KOHO will then calculate how much you’re allowed to withdraw at the end of each workday (usually no more than 50% of your earned wages).

If you opt to withdraw your funds, you can simply log into the KOHO app and submit a request for your money. That money will then be transferred either to your KOHO account or to your external bank account (note that a fee applies for non-KOHO withdrawals).

Then, once payday comes, you’ll receive the rest of your earnings via your normal paycheque, less any withdrawals you’ve made and any taxes that you owe. If you don’t withdraw anything via Instant Pay, you’ll get your paycheque like normal. Every dollar you withdraw before payday will simply reduce how much you receive on your actual payday down the line.

The best part? There’s no interest on the earnings you withdraw via Instant Pay because Instant Pay isn’t a payday loan or a cash advance.

Unlike these (arguably) predatory short-term loans, Instant Pay doesn’t actually involve any “loaning” of money. Rather, any money that you withdraw via Instant Pay is from funds that you’ve already earned.

KOHO won’t charge you interest on that money because, frankly, we’re fronting what’s already yours! That means you can wave bye-bye to sky-high interest rates and hello to a new way of mastering your finances.

Will Instant Pay work with my bank?

Since Instant Pay is designed to work within your employer’s pre-existing payroll structures, it should technically work with any bank where you already receive your paycheque via direct deposit.

KOHO also supports e-Transfers to and from nearly every bank in Canada, so sending your Instant Pay money to another bank (including the Big 5 Banks) usually isn’t an issue. But, if you do your banking with a very small local credit union and you’re not sure if it’s supported, reach out to KOHO’s customer support team for more specific advice before you get started.

That being said, while you could use Instant Pay with nearly any Canadian bank (you can always double-check if your bank is supported by contacting the friendly customer support team at KOHO), you may want to use a KOHO account instead. That’s because Instant Pay withdrawals to external bank accounts incur a $3.50 fee while transfers to KOHO accounts are free.

So in the interest of transparency, we want to be clear: while you can withdraw your Instant Pay funds to nearly any bank in Canada, you will be charged a fee for doing so.

However, you can always transfer your funds directly to your CDIC-insured KOHO account for free. Afterward, you can use your nifty KOHO card to pay your bills – all while earning sweet cash back on your transactions. Sounds like a win-win to us.

Instant Pay sounds awesome. How do I get started?

Instant Pay is what we call a “payroll benefit” so the only way to use it is if your employer already offers it to you and your colleagues. If you do work for a company that offers Instant Pay, contact your payroll or HR department for more guidance on how you can sign up for the program.

The onboarding process for Instant Pay is generally fairly straightforward, though you will need to have a KOHO account to access the platform. The good news is that you can join KOHO for free if you sign up for a Basic account. Or you can unlock a bunch of incredible features with KOHO Extra (like 2% cash back on all your purchases!) for just $9 a month.

My employer doesn’t have Instant Pay. What should I do?

If you don’t work for a company that offers Instant Pay, fear not. You have two alternative options to choose from:

Invite your employer to Instant Pay – Since Instant Pay is a payroll benefit, the only way to get access to it is if you work for a company that offers the program. Thankfully, KOHO makes it easy for you to invite your employer to join. All you have to do is fill out a simple form with the contact information for a representative from your company. From there, someone from the KOHO team will reach out directly to your employer to talk to them about the benefits of Instant Pay (of which there are many) and to give them a free demo of how it works. If your employer decides to sign up for the program, you can then enroll in Instant Pay once the platform is up and running at your company.

Instant Pay: the payroll benefit of the future

We here at KOHO are all about shaking things up in the financial world so that you can put your money to work in a way that’s best for you. Our Instant Pay tool is one awesome way to get earlier access to part of your paycheque so that you can pay your bills on time and avoid those pesky interest charges and late fees.

Since Instant Pay is designed to work with your company’s existing payroll systems, it should work with nearly every bank in Canada. KOHO also supports e-Transfers from pretty much every bank in Canada, too. As a result, there normally isn’t an issue with receiving your funds in an external account via Instant Pay, except, perhaps if you bank with a very small local credit union.

In any case, you can save a lot on fees over time if you opt to have your Instant Pay funds deposited directly into your KOHO account. Doing so is free and easy, so it helps you minimize your costs and maximize your savings. What more could you ask for?