# Paycheck-linked lending

## From payday to payback. Instantly.

Capture repayment straight from paychecks with the industry's top performing direct deposit switch solution.

## How Pay by Paycheck works

Borrowers set up in minutes and payments flow automatically from each paycheck, cutting risk for lenders and stress for borrowers.

1. **PreMatch direct deposit switch**  
     
2. **Pay by Paycheck activated**  
     
3. **Automatic repayment**

30% higher deposit conversion than any competitive solution.

## Quotes

> By integrating with Pinwheel, we are ensuring our users have the best possible experience when managing their direct deposits and finances.  
> — Dee Choubey, CEO & Co-Founder, MoneyLion

> Pinwheel has been instrumental in enabling our pay-by-paycheck model to scale. Their technology gives us the real-time payroll connectivity we need to confirm paycheck routing and verify employment — all without burdening the customer.  
> — Andy Billingsley, Product Manager at Perpay

## The modern infrastructure powering the future of lending

Enabled by industry-leading coverage & exclusive partnerships with prominent payroll providers - our suite of products makes a best-in-class Pay by Paycheck program easy to deploy.

### Benefits:

- Reduce risk of fraud and eliminate manual errors at loan approval with real-time, source of truth payroll provider data.
- Prevent delinquencies before they happen with real-time monitoring of changes to income, employment status, or deposit allocation.

# A win-win for lenders and borrowers

## Lending
- Lower default risk by aligning repayment with payday.
- Reduce costs by eliminating operational overhead, ACH fees, and costly authentication expenses.
- Deliver an optimal borrower experience with industry-leading performance and coverage.

## Borrowers
- Access lower rates and avoid late fees through consistent, on-time repayment with Pay by Paycheck.
- Automatic, paycheck-aligned payments reduce stress and give clearer visibility into discretionary income.
- Benefit from programs that report on-time payments to credit bureaus.

## FAQs: Pinwheel Pay by Paycheck

### What is Pinwheel Pay by Paycheck?

Pinwheel Pay by Paycheck is a payroll-linked repayment infrastructure product that enables lenders to collect loan repayments automatically, directly from a borrower's paycheck — on the day the paycheck is deposited.

### How does Pay by Paycheck work for borrowers?
- **Step 1:** PreMatch Direct Deposit Switch  
  At loan approval, the borrower routes a specified portion of their paycheck to the lender's account without needing to log in to their employer's payroll portal.
- **Step 2:** Pay by Paycheck Activated  
  Once the direct deposit instruction is updated, Pay by Paycheck is live and monitored in real time.
- **Step 3:** Automatic Repayment  
  On each pay date, the repayment amount flows directly to the lender.

### What performance results do lenders see with Pay by Paycheck?
- 57% decrease in late payments among Pay by Paycheck users.
- 6% improvement in default rates for borrowers using Pinwheel Verify at origination.
- 30% higher deposit switch conversion compared to competitors.

### Why is payroll-linked repayment better than ACH debit for lenders?

- Eliminates insufficient funds and processing delays.
- Reduces operational costs related to missed payments.

### What is the benefit of Pay by Paycheck for borrowers?

- Lower rates and better terms due to reduced default risk.
- Automatic payments reduce stress and enhance budgeting clarity.

### Which lender types are best suited for Pay by Paycheck?

- Consumer installment lenders and personal loan providers.
- Banks and credit unions serving near-prime and underserved borrowers.

### How does Pay by Paycheck use Pinwheel Verify to reduce default risk at origination?

Pinwheel Verify provides real-time income and employment data, improving underwriting quality by reducing fraud and data errors.

### What does implementation look like for a lender deploying Pay by Paycheck?

A lender is advised to integrate three Pinwheel components: Verify, Deposit Switch, and Connected Accounts for ongoing monitoring.

### How is Pay by Paycheck different from earned wage access?

Pay by Paycheck is primarily a repayment product for lenders while Earned Wage Access allows employees to receive a portion of their already-earned wages before payday.