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

Cash Flow
By Arjun Kaushal, Devina Khanna

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.

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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

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