New tech solution gives workers access to pay before payday
AN ISRAELI financial tech PayKey has introduced a new solution that allows employees to access their pay before payday and release their hard-earned cash with the click of a button.
This white label solution dubbed Earned Wage Access (EWA) which started in the United States and is now gaining popularity around the world will now be available in the Philippines this year. This solution can be integrated and offered by banks to their corporate accounts so that employers can integrate it as a benefit for their employees.
Thanks to EWA, employees can now access their already earned salaries at any time to pay for their living expenses. As a standalone app offered by PayKey for banks, employees can easily see their wages earned to date. Then, if they want to have an advance on their salary, they can simply apply for it through EWA. The requested amount will be transferred to the employee’s bank account upon approval.
The EWA trend will help employers minimize financial stress on their workers, which will help improve their workplace productivity and employee well-being.
In the workplace, financial stress has proven to be one of the biggest concerns that employees around the world face on a daily basis.
In a recent report, Visa revealed that 84% of 1,000 employees are troubled by their finances while working. This affects their health, well-being and productivity, as stated by 68% of respondents in this study.
Employees in the Philippines share this same experience.
According to a study by Backbase, at least 51% of 100 Filipinos surveyed said they are currently worried about the state of their finances. He also revealed that the Philippines is the top country for financial stress in the Asia-Pacific region, indicating that seven out of 10 Filipinos struggle to manage their debts.
This is the reason why most Filipinos borrow money from family and friends or from external lenders who offer high interest rates.
“EWA is not a loan. There is no interest rate because you access and withdraw your earned money. With fixed transaction fees, this will allow employees to easily advance their salary before payday to pay for their immediate expenses. We hope that with our solution, we can help banks and employers reduce financial stress for employees and improve their well-being, especially in times like this,” said Roy Gabriel, Director of innovation and CEO of PayKey.
As a new kind of service for banks, EWA can help encourage unbanked Filipinos to get banked to achieve the Bangko Sentral ng Pilipinas (BSP) target of 70% of Filipinos with bank accounts by 2023 in the as part of its digital payments transformation roadmap.
In the first quarter of 2021, BSP Governor Benjamin Diokno said the proportion of banked Filipino adults had reached 53%, approaching the target of 70%. These include basic deposit and e-money accounts.