The payments technology landscape is in constant motion, evolving quickly as consumer wants and needs change with the times.
Modern consumers often don’t want to deal with cash, checks, debit or credit cards to make payments. And when it comes to being paid by their employers, the sentiment is similar: workers don’t want to wait every two weeks for payday or rely on a paycheck to access wages already earned.
Moreover, the pandemic spurred a faster move to using touchless technologies to give and receive money. Think cryptocurrency, mobile payments and digital wallets like Apple Pay and Google Pay, and payment options like Venmo and PayPal that link to debit or credit cards. With this as a backdrop, employees also are turning to increasingly popular earned wage access (EWA) solutions, a hit to workers wanting the wages they’ve earned before traditional paydays – and for those undergoing financial stress.
Innovation in payments solutions is underway, driven by consumer wants and needs. As such, employees’ expectations have changed as they look to their employers to “consumerize” options for paying them.
As employers struggle to find and retain employees, every company benefit can serve as a differentiator. If you aren’t on board the fast-moving incoming and outgoing payments train, you could easily be left behind at the station, wondering what you could have done differently to take a ride through the modern-day payments landscape.
Let’s take a look at how some of today’s popular payment options are evolving.
Touchless payment solutions rise in popularity
A recent report shows 18% of the adult population plans to use cryptocurrency – which equates to 46 million consumers, including 17 million of whom are nonowners. The same study reports cryptocurrency ownership increased 63% last year, with a market valuation exceeding $1 trillion for the first time since April 2021. Further, 57% of crypto holders said they would pay using this method if given the choice.
Other forms of payment gaining traction include mobile payment options for sending money to others. This includes mobile wallets Apple Pay and Google Pay, both of which enable users to flash their mobile phone or smartwatch to complete purchases through a near field communication (NFC) connection. It also incorporates person-to-person payment options like PayPal and Venmo, enabling consumers to pay each other or purchase items digitally.
EWA enables companies to pay workers quickly
EWA is an increasingly adopted method for paying employees or gig workers.
Millions of today’s workers live paycheck to paycheck and cannot afford to wait until the end of their pay period to access their wages. EWA solutions enable them to get to earned wages through apps, prepaid cards, mobile wallets and virtual. And they don’t even need a bank account to do so.
Since we’re in the midst of a labor shortage, companies should consider EWA as a solution to help them stay ahead of the curve and attract and retain talent.
At Walmart, 500,000 employees use EWA, which is the company’s third most popular benefit after healthcare and 401(k).
Solutions helps ease financial stress
A recent PwC Employee Financial Wellness Survey shows 54% of U.S. workers surveyed said the financial or money matters/challenges caused them the most stress. Further, more than one-third of full-time employees said they had less than $1,000 saved to deal with unexpected expenses.
A separate study by John Hancock suggests productivity loss and absenteeism related to financial challenges cost companies $1,900 per year, per worker. It went on to suggest that financial wellness programs can help improve stress levels, job productivity and employee retention.
So, consider offering a financial wellness program or improving an existing one. This kind of initiative can help pinpoint specific money-related concerns workers have, enabling you to offer certain solutions to help.
Financial literacy education, for example, can help employees with skills that include budgeting, managing money better (think paying down or eliminating credit card debt) and even investing. And by providing EWA solutions, you can help empower them through financial flexibility. Reducing the gap between when they earn and access their wages could very well help ease financial hardships, particularly if they’re concerned that they can’t pay bills on time or put enough food on the table.
When employees know you care about their financial wellness and offer tangible solutions like on-demand pay, they are more likely to stick around.
The payments technology landscape will continue to evolve and as it does, employers can use technology to their collective advantage to modernize processes like payroll and turn them into an employee benefit.
