EARNED wage access is a new digital financing solution that allows employees to access their salary before payday and get it released with a click of a button.
For most employed Filipinos, this solves the problem of ‘Petsa de Peligro’ that feared period during the month when their cash is running low, and payday is still a week or so away. It is also during this time when emergencies and other unforeseen expenses force people to borrow cash to meet these circumstances.
Recently, Paykey is a fintech company based in Israel cooperated with several leading banks in the Philippines to start offering earned wage access (EWA) by next year. The company developed the end-to-end, white-labeled EWA solution that banks can offer to their corporate clients so employers can include it as an employment benefit to their Filipino workers.
“It is white-labeled because we want the banks to be infront of this new ecosystem,” Roy Gabriel, chief innovation officer and general manager of PayKey explained in a virtual press conference. Gabriel added that the PayKey system allows for a seamless integration with existing bank processes which further increases the benefits to the banks, the employers and the employees to which the system is designed for.
“People get paid once or twice a month on payday, and it’s been like this for many years. It’s a very outdated way of looking at how salaries are paid…If they need money to pay bills and other unanticipated expenses, especially amid the new normal, they need to find another solution. They would ask for an advance, or what Filipinos call ‘bale,’ from their employers, or even borrow from their family and friends, or take a loan from external lenders, which, sometimes can get stressful and painful,” Gabriel added.
If an employer offers EWA to his employees, their staff can simply go into the app to see how much money they earned to date. Then, they can request an advance on salary via the app. Since PakyKey’s EWA feature allows them to transfer the funds to their linked bank account immediately, they can expect the money to be credited as soon as the payment has been confirmed.
EWA trend improves an employer’s reputation as it shows a company’s dedication to supporting the financial wellbeing of their employees, delivering a positive look for present and future workers. This service is typically offered as part of a workplace benefits package for the employee.
PayKey executives explained that if employees have control over their salaries through EWA, then they can handle their finances better. They would also be more encouraged to report to work and be more productive. Gabriel also explained that the solution serves as “a major selling point in a competitive job market” as it aids easier recruitment.
“In the Philippines, the generation is getting younger. With the coming of age of digital native generations, such as millennials and GenZs, employees now expect everything to happen fast and with just a few clicks. Integrating EWA is one great way for banks to ensure that they thrive now and, in the future,” Gabriel concluded.
PayKey works with many of the leading banks worldwide to develop a standalone app. It is now working with some of the top local banks to allow this solution to their cooperate accounts, so expect to see EWA in the Philippines early next year.
