Payroll Partner Count Bottleneck
Kurtis Lin, CEO of Pinwheel, on the rebundling of payroll into every app
The core bottleneck in payroll data is not the API, it is the partner count. A lender only gets value if the system works for nearly every applicant, not just workers at ADP or Paychex. That is why the long tail matters. Thousands of smaller payroll and HR systems sit outside the biggest providers, and covering them requires one by one integrations, data normalization, and commercial agreements that incumbents built around a centralized database model have less incentive to chase.
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Equifax built The Work Number by aggregating payroll files from employer and payroll contributors, then reselling verifications. Today it says the network includes over 2.5 million employer contributors and more than two thirds of U.S. non farm payroll. That is broad, but still shaped by who has joined the network, not universal connectivity at the moment of request.
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For lenders, missing coverage is not a small flaw. Mortgage and consumer lenders need a fresh employment check close to underwriting and funding, especially after the shock of 2020 when Fannie Mae added temporary policies around verbal verification of employment and continuity of income. If a data source misses the employer, the lender falls back to pay stubs, calls, and manual review.
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This is why payroll API companies pushed beyond pure verification. Pinwheel describes a model built around direct API connectivity and write access for direct deposit switching. Plaid also added payroll income products, but payroll specialists like Pinwheel, Argyle, and Atomic emerged because stitching together fragmented systems is its own product category, not just a feature inside bank data aggregation.
The market is moving toward real time, user permissioned payroll connectivity that works inside lending, earned wage access, and deposit switching flows. The winners will be the networks that make the fragmented long tail feel invisible to the app on top, because once coverage gets high enough, payroll stops being a verification product and becomes core financial infrastructure.