Earned Wage Access (EWA) solutions that offer payroll to workers on-demand has been the hot new employee benefit in the Human Capital Management market. In Visa’s quarterly financial announcement on Tuesday (April 27th), the growth of Visa Direct was attributed, in part, to EWA transactions, so this is also important to the payments industry.
Today, Fiserv’s Money Network announced that they are partnering with Instant Financial to offer their free EWA solution. It is free to the employer and free to workers too. This means that Money Network clients will now have the option to offer workers access to their pay before payday to help bridge the gap that can occur between the time when expenses are due and pay day arrives.
This is an alternative to avoid costly credit card interest payments and overdraft fees that some workers use to make ends meet. Employees can request access to earned wages through a mobile app and have funds delivered in near real-time onto a Money Network prepaid card. With the tight labor market that some employers face as activity gets back to pre-pandemic levels, EWA will be an important tool to retain and attract employees.
Here’s an excerpt from the press release:
Earned wage access gives employees the ability to access their wages as they are earned, rather than waiting for a weekly, bi-weekly or monthly payday. Businesses can empower participating employees—especially the millions of unbanked and underbanked Americans—with immediate access to hard-earned income at no cost, giving them the flexibility to access their own money for emergencies or daily expenses.
“The ability to provide faster access to wages and tips can be a significant differentiator for corporations, franchises, governments, and other types of employers challenged with attracting and retaining talent in today’s digital-first world,” said Dom Morea, senior vice president and Head of Prepaid at Fiserv. “Pairing earned wage access with the flexibility of a prepaid payroll program that incorporates budgeting tools and spending insights is a powerful example of how employers’ can help further the financial wellbeing of their employees.”
Employees that are paid via Money Network may monitor budgeting and spending online or via a mobile app, leverage a prepaid debit card to make purchases, access in-network ATMs, transfer funds, and enable a digital wallet. Employers that integrate Money Network with EWA into their time, attendance and payroll systems can easily onboard employees, calculate their on-demand pay, and disburse funds onto a Money Network card.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group