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The future of Pay: Earned Wage Access

Published 14 MAY 2022

Earned wage Access is a Lifeline for Lives without credit.


Research from CareerBuilder shows that 8 out of 10 U.S full-time workers live on a pay check-to-pay check basis. This financial crisis, combined with the highest employee turnover rate in 10 years, has introduced a creative solution – Earned Wage Access. Over half of EWA users have reported that they would have to use a credit card to pay their due bills if EWA was not there. It appears that EWA services are reducing the hardships for those who are financially struggling.

What is Earned Wage Access?

EWA is a fintech service, an effort to help cope with reduced work hours, economic stress, and job losses. EWA allows the employees to withdraw a part or all of the wages they have earned without waiting for the payday. The cost of the withdrawal amount is usually quite minimal, and the withdrawal amount is deducted from their wages, and the residual amount is paid at the end of the current pay cycle.

How does EWA work?

Earned Wage Access or On-demand Pay is growing in demand and is fixing the traditional bi-weekly or monthly payroll cycles by giving people control over their payments. It provides workers with never-ending access to their earned money. This instant access saves the employees from the burden of loans and credit card payments or overdrafting on their bank accounts and getting buried under the expensive fees. Employers use EWA to provide safe and a positive environment in their workplace.

API integration with payroll and HR management is the most effective way to execute financial wellness programs like EWA. It means employees’ earnings are automatically available in their mobile apps, and this gives the employers to deduct all the necessary payroll deductions. It is a self-accommodating service program, and the money gets deposited in the employee’s bank account as soon as the shift is over, and they have unlimited access to it.

Factors driving the use of EWA

EWA providers are quite confident about their services as it is a better alternative to payday lending, traditional banks providing credit services, and check-cashing industries. 3 major factors are driving the use of EWA by the employers to provide wages to the employees, and those are as follows:
1. EWA is basically about helping the employees to deal with financial stress. At least in the post-pandemic era, it has been a serious problem to deal with. Employees are dependent on their firms, so when the Employers show concern and empathy towards their workers, it builds the Worker’s trust in the company.

2. EWA is a very important retention and recruitment tool for the company. It is seen young professionals get attracted to companies that contribute to their needs. Someone who used EWA for once cannot go back to the traditional payment method as EWA provides more benefits than the regular pay check system. Adding to this, employees can also check the balance amount and money spent, which helps them create a balance between their savings and Payroll.

3. Companies are using EWA to a greater extent to provide bonuses to workers to motivate them to accept unusual work shifts (evenings or weekends). Also, EWA is a low-cost service for employers. It reduces the pressure of increasing wages under the condition of giving control of wages to the employees themselves.

How EWA is the future?

• There is racial discrimination seen flooding the banks. The lack of access to credit alternatives for the racially discriminated group influences many workers to shift to EWA and become dependent on it.

• Not only racial discrimination but gender inequality is also visible when it comes to using credit cards to borrow money. This motivates EWA adoption to a greater extent.

• Middle-class workers tend to use EWA funds to pay their rent, followed by buying food, whereas the higher-class people are seen to use EWA to pay their unexpected bills and balance cash flow. This difference indicates that EWA is more needed by the low-income and middle-class people than the high-income users.

• EWA also attracts workers to the firm. Today’s young professionals take more interest in firms providing EWA services.

• Young adults have the urge to get things when they need them. This indicates a greater gravity to Earned Access Funds.

• Most users have been seen to withdraw their funds as soon as they receive them. This indicates an urgent need for fast money to meet the needs of the workers.

• EWA is also helping employers avoid paying higher wages than required.

Estimated Market Size for EWA

EWA is currently most popular among industries like grocery stores, hospitality, and restaurants, where there Is a great need for early access to wages by the workers. But it is expected that companies will give more attention to this service as soon as there is a general move in the financial services industry to get people their money as quickly as possible.

Seeing the growing interest among younger professionals in getting quick access to their salary, EWA could create a $12 market for payroll providers and disrupt the traditional payment system. According to Baird analyst Mark Marcon, the total available for this service could be $4.2 billion to $12.2 billion in the U.S. From the Worker’s perspective, giving them the control to tap their early wages gives them a greater level of satisfaction and flexibility to manage Payroll and handle emergency needs. Braid Macron wrote further that a $3 fee per transaction is far better and less expensive than the fee charged over a payday loan. From 2018 to 2020, EWA providers can process nearly $15 billion in transactions of early payroll. And it is expected that these numbers will increase in the future.

Conclusion: So, these are the main reasons why EWA can be a better option in the future. EWA employee benefits programs are estimated to give the companies a higher edge to success by attracting more capable workers to their firm, and this will lead to a brighter future.

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Editor Aronjit Roy


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