The financial pressures many consumers have faced in recent years, coupled with the economic challenges brought on by the pandemic, have forced many adults to seek new ways to access their paycheck money before it ends. of the traditional payroll cycle to compensate for unforeseen events. bills and pay the daily expenses of life. A new product, Access to Earned Wage or EWA, provides millions of workers with access to wages earned but not yet paid until payday, and as an alternative to expensive payday loans. EWA is increasingly adopted by employers and their employees and is starting to disrupt the traditional payday.
This study by Arizent – parent company of American banker and Employee Benefits News – explores how growing consumer demand for faster access to wages is creating a new set of financial services that disrupt the traditional payday, and what this means for businesses looking to recruit and retain workers.
The main findings include
- Access to Earned Salary (EWA) as a perk is a powerful recruiting tool, as most respondents said it would have a positive impact on their interest in a job that offers it. One example is Walmart, where 500,000 employees actively use EWA and it’s the third most popular benefit after healthcare and 401 (K).
- Most (77%) of EWA users choose to receive their funds instantly or on the same day, reflecting an immediate need to pay for an emergency expense such as a car repair or to make a necessary purchase such as food for dinner.
- Employees tend to pay most of the fees for faster access to salaries and receive the funds on a debit card or bank account sponsored by an employer or supplier, which creates a potential conflict of interest if a employee wishes to change jobs.
- The market is primarily served by fintechs, but a majority of users would use an EWA service if offered by their bank or credit union.