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