Popular in the UK and US, earned wage access (EWA) allows workers to access their earned wages on an on-demand basis, as opposed to having to wait 2-4 weeks for their payday.
For example, John earns $50 an hour and is scheduled to work 100 hours this month. He usually gets paid once a month. After two weeks, John has worked 50 hours, earning himself $2,500. However, he has to wait till the end of the month to get his wages paid. With EWA, John can withdraw his earned wages at any time as he completes his work.
“Up until now, if Australians have needed extra money for an unexpected expense the only solutions they’ve had are payday loans, buy now pay later options or credit cards – and they are all putting people into debt,” said Steven Furman, CEO of earned wage access provider Paytime.
“One thing we can’t change in life is that there are always going to be unexpected expenses crop up no matter how good you are at budgeting.
“Earned wage access gives employees access to their own money to pay for these things so they don’t have to borrow it from somewhere else.”
Amid the rising cost of living crisis, EWA has become an increasingly attractive option for thousands of employees living paycheck to paycheck.
It’s important not to confuse EWA with credit cards, payday loans, and pay in advance apps. Because there is no lending involved – there are no interest rates, late fees, or credit checks.
“There’s a bit of confusion here about our product, we are not a pay-in-advance app or a payday loan. We’re actually the opposite as there’s nothing for a person to pay back,” Mr Furman said.
Click here to find out more about Earned Wage Access as an employee, or click here for an information page to send to your employer.
