Make Every Day a Payday
Promote financial wellbeing, increase employee retention, and boost job satisfaction with instant access to earned wages, all while generating revenue for your platform
More than half of Americans are now living paycheck to paycheck
Even more – 70% – are stressed about their finances mostly due to inflation, economic uncertainty, and rising interest rates, according to a recent CNBC Your Money Financial Confidence Survey. 125 million Americans surveyed would be unable to cover an emergency $400 expense with their available cash or credit(1). Many Americans are living on the brink of financial ruin.
Solutions that help workers deal with financial stress are finding massive success. One solution is earned wage access (“EWA”), which enables employees to access a portion of their earnings ahead of the next payroll cycle. For example, if a restaurant worker earns $100, they may be able to access $50 of those wages through their payroll app as soon as their shift ends.
EWA is better than antiquated wage access solutions like payday loans and cash advances. Unlike payday loans, EWA typically does not charge a predatory interest rate and instead charges a small, fixed access fee. And unlike cash advances, EWA only provides access to wages that have already been earned, so there is no borrowing involved that can impact credit score and lead to debt.
How does earned wage access work?
Earned wage access allows employees to get some of their income as they earn it instead of waiting for payday – afterall, employees work days, nights, weekends, and holidays, but payday typically only runs once every other week. Employees access these earnings through an app from their employer’s payroll provider or from an EWA service provider.
As the employee accrues earnings, they will see an available balance in their app. They can then select how much of that balance they want transferred to them, usually for a small fee. When payday arrives, the employee will receive the remaining balance of their wages that they did not access through EWA.
Employers and employees benefit from earned wage access
A recent survey from payroll provider ADP found that 76% of employees believe it is important for their employer to provide earned wage access, and 8 out of 10 employees would use EWA if it were offered(2). Employees love EWA because it helps improve their financial security while avoiding the traps of payday loans and cash advances. EWA enables financial flexibility, encourages budgeting, and helps employees break their debt cycle.
The high demand for EWA shows that employees overwhelmingly see it as a huge benefit, but there are benefits to employers too. In today’s tight labor market, employers must do everything they can to attract top talent and retain their best employees. 93% of employers surveyed believe EWA helps with employee retention(2). Early signs show that EWA also improves productivity by relieving financial stress and boosting job satisfaction.
Use Astra to deliver instant wages and grow revenue
While EWA may disburse funds as soon as an employee requests, those wages may still not be available until days later because of the time it takes to settle bank transfers. A solution for this problem is using a real time payment rail, like Visa Direct. With this technology, you can push payments to a debit card in real time, allowing employees to truly access wages as soon as their shift ends – not a few days later.
Astra is the leading provider of tools for embedding, enabling, and optimizing these kinds of instant payments. We handle everything from compliance, fraud detection, chargeback management, user onboarding, and prefunding. Astra partners with payroll providers and earned wage access platforms to enable real time access to wages, keeping employees paid and happy.
With Astra, platforms with earned wage access are generating revenue by charging employees for real time access to their wages. Since Astra is optimized to provide the lowest cost transfers, providers of earned wage access can capture significant margin on these transactions while keeping fees low.
Book an Astra demo to learn how your platform can enable real time access to wages and start generating revenue today.
- Board of Governors of the Federal Reserve System, “Report on the Economic Well-Being of U.S. Households in 2021 – Dealing with Unexpected Expenses,” May 2022.
- ADP EWA research study of 500 companies with 151 or more employees. December 2021-Jan 2022. ADP EWA research study of 600 companies with 151 or more employees. March 2022