Attract top talent and reduce turnover by making every day a payday for your employees.
The Covid-19 pandemic has led to a deterioration in the well-being and solvency of millions of people around the world. This gave additional impetus to the development of earned wage access (EWA) or pay-on-demand startups as an alternative to traditional finance. Activation of deals and growth in the volume of financing forced many experts to talk about this segment as one of the most dynamic and investment-attractive.
Early disbursement of money increases the efficiency of employees and has a positive effect on the economic situation of the company. The ability to receive money at any time for unforeseen expenses (treatment, repairs, etc.) reduces the level of stress.
Pros of the access wage early:
The company signs a contract with a startup. After that, a plug-in is added to the accounting system of the business structure, which transfers the service information about connected employees, their salaries, sick leave, vacations, dismissals, etc.
According to the agreement, the employer transfers the payments due to employees not directly but through the pay-on-demand service, which, when the employee applies, can make the payment earlier, at their own expense, after which they are guaranteed to receive this money from the employer and close the resulting debt.
For such a service, the service takes a commission for each application for early payment of salaries. Sometimes, it charges interest on the amount received in advance, depending on the conditions of a particular service. But in any case, it turns out to be significantly more profitable than using microloans, which are known as payday loans. On average, the client’s expenses for paying for pay-on-demand services are ten or more times lower than for paying for microloans.
Through such services, you can receive a salary ahead of schedule, not in full, but in some large part, as a rule, this is 70-80% of the due payment.
To use the service, willing employees install a mobile application in which all the data is visible: when the salary arrives, when it can be received ahead of schedule, in what amount, how much you need to pay, etc. You can get a salary ahead of schedule immediately through the application without filling out any applications, submitting any documents, or applying anywhere. In addition, the issuance of wages ahead of schedule through such services is not considered a loan and therefore does not affect the credit history in any way.