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Earned Wage Access and Direct-to-Consumer Advance Usage Trends

Earned Wage Access and Direct-to-Consumer Advance Usage Trends

Over the past decade, several fintechs have emerged that aim to assist consumers with financial health challenges around a lack of persistent liquidity through Earned Wage Access (EWA) and Direct-to-Consumer (D2C) Advance products. Such tools are meant to shorten the window between consumers earning wages and accessing their paychecks.

To learn more about these products, the Financial Solutions Lab enlisted the Financial Health Network to collaborate with two employer-partnered EWA companies and two D2C companies and explore how their solutions can influence financial health.

Relevant takeaways for fintechs and policymakers in the space include:

  • Most consumers who use these Earned Wage Access and Direct-to-Consumer Advance products do so multiple times in a consecutive period, suggesting that the services have become a staple in their financial lives
  • Standards of recoupment practices ensure that advances are almost always recouped
  • The cost to use an advance is typically less than 5% of the advance amount, comparatively lower than high-cost liquidity alternatives

See the Latest at FinHealthNetwork.org

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