Insights
Insights

Lindsay Davis Apr 6, 2021 5 min read

What is coverage and why does it matter to payroll APIs?

Coverage is a key metric to assessing payroll APIs. However, there is no gold standard for integrating with payroll providers. Let us share how Atomic builds coverage and highlights from Q1’21.

Atomic has built and maintains over 165 unique integrations with payroll providers, or “connectors” as our team calls them. This is significant because direct deposits are the most important source of funds for US workers, and payroll coverage is key to connecting them to their paychecks and financial data.

As of Q1’21, by our conservative estimate, Atomic’s payroll APIs cover approximately 65% to 75% of the US workforce. Combined, we can reach an estimated 95 million employees.

We base these estimates on our integrations with payroll providers and employer mapping that together constitute coverage.

Click here to download Atomic’s Payroll Provider Coverage as of Q1’21

Atomics’ coverage includes private and public sector payroll providers, as well as unemployment benefits providers. As we add new providers and employers to our database, our coverage improves. A few highlights from Q1’21 include Paychex, Toast, and Waffle House, among others additions to our coverage.

Let’s look at how we segment, measure, and improve integrations.

Payroll provider segmentation

Our coverage spans five major segments or categories of payroll providers:

  1. Legacy: This includes the traditional enterprise human resources information systems (HRIS) and human capital management (HCM) software providers. Incumbent providers include ADP, Workday, and Paychex.
  2. Bespoke: This category includes bespoke enterprise HRIS portals and vertical specific solutions. Enterprise companies using a custom or white-label portal include Walmart, Citi, and Apple.
  3. Modern: This segment includes modern HCM and all-in-one HR tech platforms that target unserved segments such as small and medium-sized businesses (SMBs) and tech startups. Providers include Gusto and Rippling.
  4. Gig: This category includes platforms such as Uber, Lyft, and Door Dash, among others targeting gig-economy and non-salaried workers.
  5. Government: This category includes government databases such as Defense Finance Accounting Service (DFAS), the United States Postal Service (USPS), and state unemployment systems.

How do we estimate our coverage? 

There are two ways to calculate coverage – by payroll provider and by employer workforce.

On the payroll side, legacy providers such as ADP, Workday, and Ceridian Dayforce hold a significant share of the HCM software market. ADP, for instance, works with 460,000 US clients that employ nearly 26 million US workers, and estimates that it covers one out of every 6 workers, according to the ADP 10-K. Benchmarked to the February BLS report, ADP covers 15% to 17% of the workforce, depending on unemployment. By connecting with ADP, we are able to service those workers that use any of our fintech customer’s apps to search, connect, and authenticate into their payroll system.

On the employer side, we can measure employee coverage by employer workforce. We’ve built coverage of the USPS 600,000 workers, Walmart 1.5 million US employees, and among the majority of the largest Fortune 500 employers. All told, we can reach an estimated 95 million employees. 

If it’s that easy, why doesn’t [X] build this?

Every industry has is its own disruption narrative involving legacy incumbents and stale infrastructure, and payroll is no exception. What sets payroll APIs apart from bank APIs or other financial data aggregators is lack of regulation. As a result, there is no gold standard for integrating with payroll providers.

Connectors and integrations are also not one-to-one meaning a payroll provider, such as ADP, can represent more than one payroll integration. Depending on the employer, your user may need to login to myADP, Workforce Now, or a custom employer portal, such as Bank of America’s employee portal. Before you ask, we’ve got that covered, including ADP’s subsidiaries and enterprises that have built bespoke solutions.

What if Atomic doesn’t have coverage of a payroll provider or employer?

The better question is “when” will we add coverage for a payroll system or employer. Building coverage is a top priority because it directly impacts our conversion rate of consumers who successfully log in or authenticate into payroll. 

We add coverage based on the impact for our customers. We assess impact in two ways. The first is based on consumer search. The second is as prospects test our coverage in our sandbox environment. We’ll prioritize coverage additions based on volume of searches and size of employer or payroll provider.

How to access Atomic’s coverage

If you are an eligible customer and want to see if Atomic supports your user’s payroll providers, get in touch through our Payroll Provider Coverage signup form. To test employer coverage, reach out in the contact form below to book a demo or learn about accessing our sandbox environment.

Learn more about Atomic.

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