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Earned Wage Access: Faster Wage Payments Disrupt the Traditional Payday

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  • 20 Pages
  • June 2021
  • Region: Global
  • Arizent
  • ID: 5715070
Reduced work hours, job losses and other economic stresses have pushed many adults to seek out a new financial product - earned wage access or EWA - in an effort to help them cope. EWA is a third-party service, typically offered through an employer, that allows a worker to withdraw some or all of the wages which they have earned without waiting for the end of their current pay cycle. The cost of the withdrawal is generally a small fee paid by the worker or subsidized by the employer, and the early withdrawal amount is deducted from the worker’s wages when payday arrives.

As with any new financial product, the benefits to users must be weighed against the costs for both users and companies. This white paper will analyze both the costs and benefits, to help financial professionals better understand the big picture.

Table of Contents

  • Introduction
  • About this report
  • The EWA Industry: An Overview
  • New EWA users are flooding the market
  • EWA acts as a financial bridge for those lacking access to credit
  • How funds spent spotlights a user’s financial stress and potential dependency
  • Users want faster payments because the need is immediate
  • EWA withdrawals are all low value, depending on a user’s income perspective
  • Low-income users unintentionally pay more
  • Employers see benefits in offering EWA, but should they do more?
  • EWA providers control the deposits, but should they?
  • Banks have an opportunity to enter the EWA market
  • Conclusions