Critics of innovation in the payments community have become increasingly vocal in their opposition to Earned Wage Access. The result has been overwhelming misinformation; in an effort to set the record straight, the Innovative Payments Association has launched EarnedWageAccess.info. 

True EWA programs give American workers access to the wages that they have earned but have yet to receive. Contrary to reports, EWA is not an advance payment for services yet to be provided or a debt against future performance. EWA is simply the ability to have some control when wages are paid after they have been earned.

“With the current economic climate, people need greater control over their money, which includes when they get paid,” said IPA President and CEO Brian Tate. “In fact, for many American workers, EWA is a lifeline to obtain funds they have earned for unexpected needs such as auto repairs or health care.” 

When workers can access the pay they have earned when they need it, they can better manage their financial health. Unfortunately, according to a 2023 Financial Health Network report, “more than four out of five (84%) Americans were not financially healthy at some point between 2018 and 2022.” This shows that workers need more help, not less, and many EWA providers integrate financial literacy resources to help workers live within their means.

One reason for the need for EWA is that, currently, employers have full control over when workers are paid. According to the Bureau of Labor and Statistics, 73 percent of the time, businesses pay biweekly, semimonthly, or monthly – leaving a lot of time between wage payments.  

However, critics continue to say that EWA is not a financial tool that can empower workers to make financial decisions that are best for their families. Instead, they say, in simplest terms, it’s a loan with high fees. They ignore research from third parties, including former Consumer Financial Protection Bureau (CFPB) Director Richard Cordray, who, after several years of researching the payday loan market, determined that EWA was not a credit product, and that “no-cost advances and programs to advance earned wages when offered by employers or their business partners” were nothing like payday loans.

“Giving workers the ability to control when they are paid their earned wages gives employees more control over their personal financial lives, which is the right thing to do in these challenging economic times,” said Tate.