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Earned Wage Access Should Be Available to All Employees

The new niche industry of earned wage access has the potential to benefit millions of employees so long as it can play well with regulators

August 22, 2019 By Peter Renton 4 Comments

Views: 1,976

Like many areas of fintech, earned wage access (sometimes called earned income access or payroll advances) wasn’t really a thing until recently. Now, it is a thriving niche industry with companies such as PayActiv, Earnin, Even, DailyPay, HoneyBee and others providing offerings in this space.

In a sign that earned wage access is gaining mainstream approval Walmart signed a deal with PayActiv and Even back in 2017 to allow its workers early access to their pay. Currently over 300,000 Walmart associates take advantage of this service.

Before we go any further, I should define earned wage access. It is a mechanism for employees to get access to wages they have already earned. It breaks up the weekly, biweekly, or monthly pay cycles so workers can receive money that is rightfully theirs before payday. Typically, workers will pay a small fee for this service. Earned wage access is not credit and thus it has very little in common with traditional loan products.

Dan Quan, former head of innovation at the CFPB penned an excellent article on this topic in American Banker a couple of months ago. Here is a quote from that article (he calls it Earned Income Access – or EIA): [Read more…]

Filed Under: Fintech Tagged With: DailyPay, Dan Quan, earned wage access, Earnin, Even, HoneyBee, PayActiv, Walmart

Views: 1,976

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LendIt Fintech News, Powered by Lend Academy, has been bringing you all the news and information about fintech and online lending since 2010 when it was founded by Peter Renton. We not only have the industry’s most active news site, but also the largest investor forum and the first and most popular podcast.

We are a team of fintech enthusiasts who have been covering the industry for many years. With a deep knowledge of online lending, digital banking, blockchain, artificial intelligence and more our team covers the daily news and writes in-depth editorials.

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