Target Market Determination
1. What is a Target Market Determination?
A Target Market Determination (TMD) describes the customers (the ‘target market’) for which a financial product has been designed, taking into consideration their likely objectives, financial situation and needs. It also outlines the conditions surrounding how the product is distributed to customers, and the events or circumstances in which Paylab would be required to review our TMD.
2. Why does Paylab need to have a Target Market Determination?
Paylab allows customers access to their ‘earned’ wages before payday and enables them to swap these ‘earned’ wages either for instant-use gift cards (“Go Shopping Product”) or for immediately available cash (“Pay myself Product”).
Paylab is required to have a TMD under the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019.
The purpose of this legislation is to ensure customers are at the centre of Paylab’s approach when designing and distributing its products. Note, this TMD applies only to Paylab’s Pay myself Product, as the Go Shopping Product does not fall within the scope of the applicable legislation.
This TMD is not to be treated as a full summary of the Pay myself Product's terms and conditions and is not intended to provide financial advice. Consumers interested in using the Pay myself Product, should refer to Paylab's Terms and Conditions of Use and Paylab’s website when making a decision as to the suitability of this product.
This TMD is effective from 1 March 2022 as updated on 2 November 2022.
3. Target Market
The information below summarises the overall class of consumers that fall within the target market for Paylab’s Pay myself Product based on its key attributes and the objectives, financial situation and needs of consumers that it has been designed to meet.
Objectives, financial situation and needs of the target market
Paylab’s Pay myself Product is targeted at customers who need early access to their wages to manage their cash flow or handle unexpected expenses between their employer's pre-defined payroll periods.
Specifically, this product is targeted towards consumers who:
- Meet our eligibility criteria;
- Have the objective of obtaining early access to their wages for a small-fixed fee or for free; and
- Need access to a portion of their earned income in advance of their normal payday to resolve a temporary financial need or manage the timing of personal finances.
Paylab’s Pay myself Product has been purposefully designed with employee wellbeing in mind. This product is offered to Employees of participating employers and linked to payroll and/or workforce management systems to provide workers with cash flow flexibility through a responsible short-term credit facility.
Key eligibility requirements
To be eligible for Paylab’s Pay myself Product, new consumers must meet all of the following eligibility requirements:
- be 18 years or older and an Australian resident or visa holder; and
- be employed by and currently earning an income from a participating employer (Employer Partner); and
- have received at least one payment from the Employer Partner.
Excluded class of consumers
Paylab’s Pay myself Product has not been designed for individuals who:
- Are under 18 years of age;
- Are non-Australian residents or visa holders; or
- Are not employed by an Employer Partner.
Description of Paylab’s Pay myself Product
Paylab’s Pay myself Product allows employees to access a portion of their after-tax income as it is earned or accumulates through their pay cycle at any point in the pay cycle and prior to their official payday via the Paylab mobile app.
For cash transfers using the Pay myself Product, customers can transfer any or all their available balance, subject to a minimum transfer value of $100 and Paylab will charge a service fee of 2.5% of the amount transferred.
The term will be aligned with the employee's pay cycle, which may be weekly, fortnightly or monthly. There will never be any additional fees charged to the user beyond 2.5% of the amount transferred, and there is no interest or late fees.
Key features of Paylab’s Pay myself Product
Paylab’s Pay myself Product has the following key attributes:
- Approved employees can access up to 50% of their after-tax income as it is earned or accumulates through their pay cycle;
- Paylab charges a service fee of 2.5% of the amount transferred but does not charge interest, late fees or penalties;
- The amount accessed by the employee and the service fee are automatically deducted from their upcoming pay, on the same day that their wages or salary is normally paid to them;
- In certain circumstances, such as when the consumer's employment has been terminated, employees authorise their employer to deduct fee from their final payment any amount accessed by the employee in the current pay cycle and the service and to pay this amount to Paylab.
- The term is specified at the point in time an employee requests to access their accrued wages, up to a maximum of 31 days.
Consistency between target market and Paylab’s Pay myself Product distribution
The distribution of Paylab’s Pay myself Product is consistent with the target market on the basis that:
- It has been designed and distributed to support individual financial wellbeing by providing eligible workers the option to access up to 50% of their net after-tax income as it is earned or accumulates through their pay cycle;
- The eligibility criteria have been designed to align with the characteristics of the target market - only those who are employed by an Employer Partner, are over the age of 18 and are an Australian resident are able to use the Pay myself Product; and
The key attributes of the Pay myself Product have been designed to meet the likely objectives, financial situation and needs of employees in the target market described above, noting that any employer can become an Employer Partner.
4. How Paylab's Pay myself Product is to be distributed
Paylab’s Pay myself Product is designed to be distributed via a mobile application only, with the product being initially introduced to target markets largely through any employer who signs up as an Employer Partner, and aims to provide improve the individual financial wellbeing of those employees.
Paylab’s Pay myself Product should only be distributed under the following circumstances:
- To individuals who meet the eligibility requirements described above;
- To individuals that have the financial capacity to repay the amount they access within a single pay period;
- To individuals who are able to pay the service fee of 2.5%;
- To individuals who are approved for the Pay myself Product in accordance with Paylab’s internal policies and procedures, and applicable laws and regulations.
Adequacy of distribution conditions and restrictions
Paylab has assessed the adequacy of the distribution conditions and restrictions of its Pay myself Product and formed the view that they are appropriate for the following reasons:
- Paylab will have oversight of how the Pay myself Product is promoted and issued;
- the Pay myself Product is distributed with an Employer Partner's support which helps ensure that consumers who obtain the Pay myself Product meet the target market criteria points;
- The marketing and distribution channels for the Pay myself Product are selected based on an assessment of the distribution conditions and restrictions to determine that they are appropriate, and will assist distribution in being directed towards the target market for whom the Pay myself Product has been designed.
6. Review triggers
We will review this target market determination in accordance with the below:
Within 12 months of the effective date
At least every two years following the initial review
Review triggers or events
Any event or circumstances arise that would suggest the TMD is no longer appropriate. This may include (but is not limited to):
Material changes to the regulatory framework governing the Pay myself Product.
Where a review trigger has occurred, this TMD will be reviewed within 10 business days.