Earned Wage Access: A tool that allows access to your everyday income

Samiksha Goel

NEW DELHI: If one could accrue one’s earned pay on a daily basis, would it ease his/her financial pressures? Around 38% people in a survey responded in affirmative to what may seem like a hypothetical question but is not.

A bank-like setting, where you can see and withdraw the money that you have earned, or as it is called, Earned Wage Access, is a fintech product enabling employees to access a portion of their accrued but unpaid salary any time before payday.

Employees, according to a Refyne survey, seem thrilled about the new concept. While 77% of respondents feel positive about this concept and are ready to evaluate its usage, 28% said they would use a EWA product. Notably, 59% of respondents would consider EWA as a deciding factor for their next job.

The report further discovered that the highest interest for EWA exists among the millennial professionals. Employees feel that EWA will help them with more liquidity to manage unexpected expenses, investment planning and improve their financial wellbeing.

But what about employers?

Refyne, which claims to be India’s first and largest EWA platform, established in 2020, has onboarded 120 clients in the last one year.Chitresh Sharma, CEO and Co-Founder, Refyne, says the start-up is witnessing steady traction with month on month growth with new clients as well as increasing adoption among existing partners’ staff as employers can clearly observe advantages for their employees (both full-time and contracted) with Refyne’s Earned Wage Access solution.

“For employers, Refyne is a free, zero-risk product that seamlessly integrates with any HRMS and payroll software. Refyne fronts the capital for the earned salary withdrawals, meaning employers’ working capital remains untouched and allows them to maximise their cash flow. EWA also helps save man hours for HR managers spent in processing salary advances and the associated paperwork,” said Sharma, noting that Refyne does not have any direct competitors in the country, and its indirect competitors include payday lenders, loan apps, loan sharks, and other informal and unregulated credit scheme providers.

Akbar Khan, who is the CEO of a EWA start-up Rain India, says his company is working with the leading enterprise clients across manufacturing, IT, staffing, healthcare, hospitality and other sectors in India.He says there are only a handful of EWA companies operating in India.

“EWA is a relatively new concept for the Indian market which is clearly differentiated from the personal/ consumer loan, salary advance and payday loans.”

Before Rain launched its business in India earlier this year, they also undertook an in-depth primary research exercise of the salaried employee cohort.

“Some of the interesting insights coming out of the research demonstrated a strong product market fit for EWA and the need for a credible global financial wellness provider with deep local expertise. For example, 90% of those surveyed received their salaries once, at the end of the month, while 20% ran out of funds in the first 10 days of the month, 40% by the middle of the month and 85% by the end of the month,”

Sumeet Doshi, Country Manager, UKG India, a company that has recently partnered with Rain, says providing access to their own earned wages is key to ensuring that employees feel valued and supported and are able to take charge of their own financial wellness.

“Our partnership with Rain India ensures that we continue to fulfil our commitment to ensure meaningful and impactful solutions to our customers here in India.”

HR concerns

While employees seem intrigued, HR leaders are concerned about the EWA solution fitting into the lifestyle or culture of the Indian workforce.

“The reason being, the flexibility to access wages any day of the month, will demand a lot in terms of administrative work. Another big challenge that HR heads foresee is that of absconding workers. In the western professional culture, the longevity factor is quite high. Employees stick around with their companies for a long time. In India, on the other hand, there are many industries where the attrition is very high,” says Vicky Jain, Founder of HR tech start-up uKnowva, explaining, such a change will need a major transformation in the culture of the organisation as a whole.

Also, from a technical perspective, the existing payroll infrastructure may not be set up to handle regular demands from employees to be paid, Jain said.

“While there’s no doubt that EWA is a game-changing approach to improve payroll, a fantastic opportunity to be progressive and forward-thinking, and a flexible way to support employees’ changing work habits and lifestyle in the post-pandemic era but implementing the same in the Indian work culture wouldn’t be an easy task. The concept is still new and only time will tell whether it’ll gain traction in the Indian work culture,” he added.

New pay cheque

  • Earned Wage Access (EWA) is a fintech product which enables employees to access a portion of their accrued but unpaid salary any time before payday.

  • Millennial professionals show the maximum interest in EWA.

  • Employees feel it will help them with more liquidity to manage unexpected expenses, investment planning and improve their financial wellbeing.

  • Employers are concerned that the flexibility to access wages any day of the month will demand a lot in terms of administrative work.

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