Modern Pay, for Modern Loan Officers.
August 22, 2023
Your Guide to Earned Wage Access Platforms
Earned wage access platforms allow employees to access their money before payday. This is done through secure API connections that verify an employee's earned income and a direct deposit authorization similar to Zelle or Venmo.
parpay deposits a portion of an employee’s earned income directly into their existing bank account. Employees can then use the money for whatever they need, such as paying bills or buying food, and will be deducted from their paycheck when it’s paid out on their next payday.
Earned wage access platforms provide several benefits to both employees and employers.
For employees, these platforms offer financial security that traditional payroll systems don’t provide. By waiting for payday to get paid, many Mortgage Loan Officers (MLO's), who do not receive a steady or dependable income, may struggle financially and end up taking out expensive loans just to survive until their next paycheck arrives. With parpay access, these MLO's can receive their earned commissions as soon as they close and fund, giving them financial stability and decreasing the likelihood of taking out costly loans in order to pay their bills.
For employers, parpay can reduce administrative costs associated with manual payroll processing of an early commission request, while ensuring compliance with labor laws by allowing a third party Earned Wage Access provider to handle these early income requests. Additionally, earned wage access platforms often integrate with existing payroll systems making them easy to set up and manage, while also helping to reduce reconciliation errors.
Finally, earned wage access platforms can improve morale among MLO's who no longer have to worry about financial struggles related to not having enough cash-flow between paydays, resulting in higher productivity levels, less turnover, and more talent attraction, ultimately increasing profits and reducing costs.
Earned Wage Access Platforms Benefits
Convenience: Earned Wage Access (EWA) platforms allow employees to access their wages quickly and easily as soon as they have earned them. This means that workers can access their money when they need it, without having to wait until payday.
Flexibility: Instead of being tied to a single source of income, EWA platforms offer flexible payment options – allowing employees to access their wages in smaller chunks or on a recurring basis, depending on the worker’s individual needs.
Reduced costs: By avoiding traditional financial mechanisms like overdraft fees and high-interest loans, EWA platforms help employees save time and money. Employees who opt for immediate wage payment through an EWA platform will not incur late payment fees or interest charges from lenders.
Improved financial security: By providing employees with greater control over their finances and when they receive their wages, EWA platforms give them the assurance and stability of knowing that their paychecks are secure each month. Additionally, by giving employees more control over when they earn money, it helps reduce the stress associated with waiting for your paycheck at the end of the month.
Improved budgeting: With an EWA platform, workers have immediate access to data related to how much they have earned so far in a given month – making budgeting easier than ever before. This allows workers to better plan ahead and make informed decisions about how to allocate funds during each pay period.
Earned Wage Access Platforms Trends
Earned wage access (EWA) platforms provide a way for employees to access their wages before payday. They allow workers to draw against their wages, usually in the form of a loan, so they can access their money right away.
The EWA trend is gaining traction as more companies turn to this approach to improve employee financial wellness. Employers see the benefit of giving employees access to their wages when they need it most, which helps reduce financial stress.
The trend has become increasingly popular among gig workers who may not receive a traditional paycheck every week or month. It gives them the flexibility to access the money they’ve earned when they need it and helps them manage their finances more effectively.
EWA platforms are becoming more affordable as well due to competition from new entrants into the market. Platforms are also offering more features, such as budgeting tools, that help employees better manage their finances and make informed decisions about their spending patterns.
EWA platforms are also growing in popularity among businesses of all sizes. Businesses see the benefit of offering these platforms to employees as it helps increase productivity and reduces payroll costs. Additionally, businesses can use EWA platforms to provide incentives to employees and reward them for productivity or performance-related activities.
Mark E. Carlson