7 tips on what to look for in earned wage access (EWA) providers

Earned Wage Access (EWA) is a financial wellness benefit that empowers employees to feel secure in their financial situations and not live by rigid pay cycles. Providing employees with the  financial wellness resources like EWA means they can access a percentage of their total earnings in a pay period to help manage their expenses or cover life’s unexpected costs, and even save for their future.

Not only does EWA improve employee financial wellness and team morale but it's also a proven way to bump recruiting and retention efforts. In ZayZoon’s state of employee financial wellness report, we surveyed 500 senior HR professionals about employer issues who noted that turnover rates decreased by 29% with EWA. A remarkable 81% of HR leaders said providing EWA gives business a competitive edge when recruiting, with 42% of employers able to recruit because they offered EWA. 

EWA offers instant pay on earned wages in an effort to  eliminate cash flow issues employees may face. Many EWA providers have no cost to the employer, only a small transaction fee when an amount is deposited. Other EWA options from such providers, such as ZayZoon, include gift cards with cost savings so employees can get what they specifically need. 

With so many available options, which EWA provider is best for you and your employees? Read on for our definitive guide to choosing the best earned wage access solution for your business.

Read ZayZoon’s state of employee financial wellness report.

What is EWA 

Earned wage access is exactly how it sounds: an employee is able to access a portion of their upcoming paycheck ahead of time. EWA is sometimes called on-demand pay. 

If someone needs to access a percentage of their earnings a week before payday to fund an emergency, such as an unplanned vet bill or car payment, that’s possible. It helps avoid going into overdraft, high-interest payday loans or incurring more credit card debt. 

Types of EWA offerings

1. DIY EWA: This isn’t a fun, Pinterest adjacent option where you cobble together some kind of payment before payday. DIY EWA is really a salary or pay advance system employers will offer their employees but it looks a lot more like a loan. Employers can loan an employee with a portion of their earnings that are paid back through payroll deductions. There’s usually a bit of a process to getting it set up and requires a lot of ongoing work.
2. EWA provider: If you’d rather go straight to the source, consider an EWA provider. In many cases, an established EWA provider has a relationship with a payroll provider, or human capital management (HCM) or people employer organization (PEO) solution. From there, you can access the integration and have it set up for your employees in minutes. Many payroll providers do have this feature, which is embedded into the payroll and quickly available for your employees. 
   
   

“A lot of our employees used to ask for cash advances and we were on a biweekly pay schedule. We wanted to meet their demands and offer them pay on their own terms, especially since that’s something that clearly mattered to them. That's how we learnt about ZayZoon… My employees love it, 38% of them have used it.”

Art Alamo, Franchise Owner at McDonald’s

7 things to look for in an EWA provider

What you will need from an EWA provider comes down to a few factors and are largely dependent on your needs for EWA, like if you’ve got a high turnover rate or low morale at work or the size of your business. We’ve collected some of the most common functions and features to look out for when you’re considering an EWA provider. 

1. Payout flexibility

A key component of EWA is access to funds. Many EWA providers offer nearly instant access to a portion of an employee’s earnings. 

To maximize what and how an employee can get their earnings, there are three common options that remain flexible: 

• Payout to bank account: Direct deposit or e-transfer payments to a bank account generally incur a small transaction fee—typically between $0-$5—and can either be covered by the employer or the employee. The fee is usually for each transaction. 

• Payout to a prepaid card: Many on-demand pay platforms now offer their own debit cards. Similar to bank account payouts, prepaid card payouts are quick and easy and a great alternative to other options. Digital debit cards can be sent to employers immediately with physical cards sent by the EWA provider typically two weeks after the request. 

• Payout to a gift or gas card: An important perk many EWA providers offer is gift or gas cards to employees instead of money. Some employees use that money for such purchases anyway, like filling their car up with gas or needing groceries. Having a gift or gas card with the amount on it takes away any middle step. In some cases, too, these cards have a small percentage top-up, which means an employee is getting a few dollars more added to their card.  
  
  

2. Educational resources and financial wellness tools

A key differentiator between EWA providers is providing financial educational resources and tools. Such materials are key for anyone who may need an extra boost without feeling ashamed to not know certain money hacks or tips. Some resources may include blogs, reports, podcasts, how-to’s, money quizzes and more to make engaging with financial wellness tools and educational materials fun and easy. Some platforms may provide budgeting tools, mortgage calculators and more as a nice added bonus. ZayZoon, for example, offers smart insights with predictive analysis for a person’s budget and expenses. 

3. Implementation 

The right EWA tool for your business likely comes down to how easy it is to implement into your tech stack or resource ecosystem. In general, implementation should be fairly simple on your end. It doesn’t matter if you’re using a traditional payroll system or online payroll software, implementation should be easy enough to offer flexible payment schedules to your employees.

Some of the most notable payroll providers offer EWA already. In some cases, you may be a single click away from offering this benefit to your employees. These EWA-ready payroll providers include: 

• ADP
• Paycom
• Paylocity
• Paychex
• Ceridian

While implementation may be fairly fast, it’s important to note it takes about 30 business minutes to one business day to get up and running. 

4. Market segment

Your business’s size and overall goals will help determine your EWA provider. There are many different EWA providers with the ability to serve different business needs. For example, DailyPay almost exclusively works with enterprise-sized businesses. ZayZoon specializes in and has experience with small-to-medium sized business (SMB) with a focus on verticals and industries such as healthcare, hospitality, and quick service restaurants (QSR). 

5. Employer cost 

EWA providers can vary when it comes to employer cost. Some EWA programs and resources are free to employers, such as ZayZoon. To remain free to employers, employees using EWA by way of, for example, an e-transfer or deposit are charged a small transaction fee. Providers that have a cost associated with them may offer a subscription fee and remain free for employers to use. 

6. Ease of use

A hallmark trait of EWA is how easy it is for any employee to access their money. EWA needs to be available on desktop and mobile devices, across iOS and Android operating systems. ZayZoon, for example, can e-transfer a percentage of an employee’s earnings before pay day in a few clicks and a couple of minutes later it’ll be in their account. In some cases, employees may choose an instant gift card or gas card to use. Accessing that needs to be just as easy for employees to reduce barriers to access.

For employers, EWA needs to be easy to use as well in the backend, including data analytics on who is using the benefit, and access to promotional resources to help drive resource adoption. 

7. Customer support

We can’t overstress the importance of exceptional customer support. Both employers and employees deserve and need to speak to someone to troubleshoot any EWA issues. Some indicators of solid customer and client support include access to a customer support representative (someone to speak to on the phone or via chat) and a dedicated partner success manager who can explain how EWA works, what resources are available to explain the benefit.  

EWA at ZayZoon

EWA at ZayZoon helps employees enjoy a flexible financial reality—providing access to anyone who needs it for emergencies, household necessities, or even understanding how to save for their future. Especially for small and medium-sized businesses, offering ZayZoon’s EWA and perks as an essential employee wellness benefit can set you apart from the competition, bringing in and retaining top talent.

ZayZoon offers your employees relief in one click. ZayZoon also has perks, like instant gift cards or gas cards, and financial educational resources so your employees get exactly what they need when they need it, while learning more about how to make the most of their money.

Try a free ZayZoon demo.