#WealthTech #FinancialWellness / Gusto is expanding from payroll into a full suite financial wellness platform

SMB payroll startup Gusto raises $200M Series D, plans R&D expansion to NYC… the company announced a slew of new offerings that it hopes will give employees better financial and health options through their employers.

The most interesting one here is a tool the company is calling Gusto Wallet. It’s an app and collection of products for employees paid through Gusto that basically acts as a mini bank and financial health monitor. It offers an interest-bearing cash account (called, appropriately enough, Cash Accounts) which can also divert a small slice of each paycheck into a user’s savings, similar to products like Acorns and Digit. Cash stored in the account earns 0.34% interest today, and you can also get a Gusto debit card to spend it.

In addition, Gusto Wallet also offers “Cashout,” which can accelerate a payday ahead of time based on the pay history of an employee. Rather than securing a high-cost payday loan, the product is designed to help users smooth out a bit of their income if they need their paycheck a bit ahead of their actual direct deposit. It’s also free of fees.

… It’s very, very hard to acquire a customer in financial services, and it’s so competitive that the cost per acquired customer is extremely high (think hundreds of dollars or more per customer)… Gusto is an interesting play here precisely because it starts at the payroll layer. Banks and other savings apps often try to get you to send your paycheck to their service, since if your money resides there, you are much more likely to use that service’s features. Gusto intercepts that transaction and owns it itself. Plus, because it ultimately is selling subscriptions to payroll and not financial services, it can offer many of these features outright for free.

[CEO] “This is a future that just seems inevitable, like all this information right now is sitting in silos. How do we give the employee more of that ownership and access through one location?” By combining payroll, 401(k) planning, savings accounts, debit cards and more in one place, Gusto is hoping to become the key financial health tool for its employee end users.