Earned wage access providers enable workers to get an advance on earnings — to pay bills or make necessary purchases — without waiting until the end of their pay cycle.
Between the lines: Most providers offer the ability to transfer funds for free to a linked bank account via ACH, and those funds can be accessed in one to three business days.
- Many also offer the ability to transfer funds to a branded debit card for no fee.
- If workers opt to access those funds immediately, providers typically charge a small fee of $2 to $5 for an instant transfer to their account.
On the back end, how EWA providers recover funds varies, depending on whether they are employer-sponsored or direct.
- Employer-led providers are paid back by the employer or payroll provider by simply deducting advanced wages from workers' net pay.
- Meanwhile, companies offering direct-to-consumer pay advances will take back the borrowed amount from a user's account when they recognize a direct deposit from an employer.
