New Study: Access to Earned Wage Gives Consumers Control of Their Finances and Their Lives
PALO ALTO, Calif .– (COMMERCIAL THREAD) – 92% majority of consumers receiving Earned Wage Access (EWA), a service that allows you to get paid as you earn, said it helps them pay their bills on time, avoid overdraft fees and payday loans; and become less reliant on credit cards – allowing them to meet at least one of their financial goals in 2020. According to a new survey from FTI Council, consumers experienced less stress and better financial and emotional health with the help of EWA.
The Research study, driven by To win with several industry partners, found that breaking the traditional two-week payroll cycle gives workers the tools they need to manage their finances, and found that without EWA, 44% of users would otherwise consider not pay some bills and more than a third of consumers would deliberately overdraft or use a payday loan.
“Financial empowerment and building a more equitable financial system begins with ending the traditional paycheck cycle”, said Ram Palaniappan, Founder and CEO of Earnin, an EWA provider focused on building products for a fairer financial system.
“This data confirms what we hear every day from our users: Giving people access to their paychecks helps them pay their bills on time and avoid overdraft fees, payday loans and reduce dependency on paychecks. credit card.”
The study of 4,735 Earned Wage Access clients aims to understand how consumers use and financially benefit from Direct-to-Consumer Earned Wage Access (D2C) services that allow people to access their low-income income. time after winning it.
Overall, the study found that by having access to their salary through EWA services, consumers felt more in control of their finances and had better financial well-being. The majority (around 88% of respondents) believe that having access to their salary as it was earned during the pandemic was essential to their financial well-being.
The main additional findings include:
Ninety-two percent (92%) of EWA consumers felt that the service helped them achieve at least one of their financial goals in 2020 of paying their bills on time, avoiding fees and charges. overdraft and payday loans, and become less dependent on credit. cards.
An overwhelming majority of consumers (91%) said they understood how the EWA service worked and understood the associated fees (89%).
A strong majority of EWA users reported an improvement in their general well-being after using the service. Eight in 10 said they felt less stressed about their financial situation (82%), had better self-esteem (81%) and improved their mental health (77%).
Without access to an EWA service, 44% would consider not paying some bills on time, 38% would consider overdrafting, and 35% would consider using a payday loan.
The majority of respondents (60%) said they did not have tools from their employer to better control their finances.
When it comes to better understanding EWA users, the study found that half are not white and the majority are Millennials between the ages of 25 and 40. The average annual household income of users is $ 50,700 and more than half have some level of college education. The majority of respondents use EWA every two weeks and access an average of $ 100 to $ 149 to pay their bills on time (61%), avoid overdraft fees (52%), and shop for groceries (52%).
This research was conducted online by the Digital & Insights team at FTI Consulting, on behalf of Brigit, MoneyLion & Earnin.
Earnin’s mission is to create products for a fairer financial system and better lives. Designed for the unique needs of those who live paycheck to paycheck, Earnin is designed to free people from the traditional payment cycle and help them take control of their money, from the moment they earn it. Earnin’s full suite of tools include: Cash Out, which provides access to income as it is earned, Balance Shield, a low balance alert to help maintain a positive bank balance, Financial Calendar which helps people budget and schedule payments, and Tip Yourself, a way to save money to meet savings goals. Earnin is supported by the community with no mandatory fees or hidden costs. People tip whatever they choose to support the service. As of September 2021, Earnin had completed over 125 million transactions and provided access to $ 10 billion in revenue for its members.