Amazon will offer instant pay for workers and more loans for sellers

Yesterday Amazon announced a median increase of $1 per hour in starting wages for new hires. The average starting rate for “front line employees in customer processing and transportation” is now $19 per hour, with salaries ranging between $16 and $26 per hour, depending on the position and the location.

In the same press release, Amazon also revealed that it would begin offering its instant payment system, Anytime Pay, to all US employees in its operations, enterprise, and technology departments. The program allows workers to access up to 70% of their eligible earned wages whenever they want, without fees, interest or penalties. “Previously, most Amazon employees received their regular salary once or twice a month,” the company explains. Now, however, employees can access “their earned wages as often as they wish”. At 70 cents on that one dollar raise until their official paydays, that is.

[Related: Amazon’s new warehouse employee training exec used to manage private prisons.]

The company also revealed in a separate statement this morning that it further develop in the financial sector. Through a partnership with lenderthe company is rolling out Amazon Community Lending nationwide to “support small urban and rural businesses in socially and economically challenged communities with short-term loans at competitive and affordable rates” after announcing a pilot launch last year. “Since its launch, the program has lent more than $35 million to more than 800 sellers, surpassing the original goal of $10 million during the pilot,” the announcement reads. “Now the program plans to lend more than $150 million over the next three years to small businesses selling in Amazon’s U.S. store.”

[Related: Four workers die in Amazon warehouses across 22 days.]

The loans are said to be between $10,000 and $250,000 with repayment terms of up to five years, and are subject via Lendistry to origination fees of up to 3%, with an APR typically between 8 and 11.99%. These rates aren’t exactly the best compared to industry averages, which vary between 2.5 and 8%. The availability of “interest only” loan options can set off financial red flags for some – like Investopedia explains“These loans are best for sophisticated borrowers who fully understand how they work and what risks they take.”

The company joins rivals like Walmart, which offers similar services to its own employees as it prepares for a host of financial expansions on the consumer side.

Correction 09/29/22: A previous version of this article stated that “interest rates were not immediately available to the public.” This has been updated to reflect interest rates provided to PopSci by Amazon and Lendistry.

Harry L. Blanchard