Accelerated Wage Access (AWA), defined as any solution that allows access to wages earlier than the monthly pay cycle, is shaping the future of work and becoming an integral part of employee benefits packages.

Workers increasingly demand flexible, instant payments to fit their modern lifestyle and changing financial needs.

While society has continued to modernise how we pay for our goods and services, the way workers receive pay has not necessarily advanced at the same rapid pace. Now, employers are rectifying this, by utilising embedded finance innovation to offer workers access to their earned wages as soon as their shift is complete, helping to ensure better management of finances in a secure and cost-effective manner.

AWA is rapidly gaining traction, and currently, one in ten UK employers offer this benefit. This article explores why instant pay appeals to both businesses and employees, the growing demand for the service, and the importance of partnering with a provider that delivers personalised, secure, and compliant payment solutions to ensure that AWA can truly shape the future of work.

AWA Is A Win-Win

AWA benefits both employees and employers. For workers, AWA offers immediate access to earned wages, helping to reduce financial stress. The immediacy of AWA also strengthens the connection between work completed and compensation received, creating a sense of reward and motivation which enhances job satisfaction and loyalty.

Employers also gain significantly from implementing AWA. In a competitive job market, offering AWA can make a company more attractive to prospective employees, particularly younger workers who prioritise financial flexibility. This helps in talent attraction and retention, contributing to a stable and motivated workforce. Additionally, reducing employees’ financial stress can lead to increased focus and productivity, directly benefiting the company’s bottom line.

Potential Across A Wide Range Of Sectors

The gig economy, marked by short-term, flexible jobs often secured via digital platforms, was an ideal launch point for AWA. Workers in ride-sharing, food delivery, and freelancing often face irregular incomes and fluctuating demand, and AWA helps them manage cash flow, removing a lot of the financial risks associated with this form of work.

However, the benefits of AWA extend beyond the gig economy, and it’s now being offered as an increasingly standard benefit across a variety of industries, including retail, hospitality, and healthcare. These sectors recognise that providing immediate access to earnings can significantly enhance job satisfaction and reduce turnover—a critical advantage for these industries.

AWA has potential applications across a wide range of sectors. Manufacturing and construction could benefit from the financial flexibility AWA offers. Even salaried positions, particularly in sectors like education and public service, could see improvements in employee well-being and productivity by adopting AWA models to help workers navigate challenging economic times.

Customised Cards

The technological advancements that make AWA possible are rooted in modern payment technology and embedded finance platforms. Deploying a financial hub built on embedded finance enables businesses to provide an array of financial services, such as instant pay and tailored rewards programmes . It’s vital that rather than having a one-size-fits-all instant pay solution, employers tailor their AWA offering to meet the specific needs of the business and workers while keeping the brand front and centre. This is the future of the payments industry, and we will increasingly see companies developing their own, branded cards to provide workers with payments and expense management on demand.

For example, labour technology company, WorkWhile is partnering with Marqeta to provide a branded debit card for workers, ensuring they can access their wages as soon as their shift hours are approved, helping to significantly reduce their need for credit and improving their financial well-being.

Similarly, Uber works with Marqeta and Branch on its Uber Pro Card, where earnings are automatically deposited after every trip—free of charge. It also gives drivers and couriers the ability to get more cash back on gas and EV charging, track earnings, transfer money to other bank accounts, earn rewards, and manage savings.

Addressing Risks

While AWA offers substantial benefits, it must be implemented responsibly to avoid potential pitfalls. To ensure a successful and sustainable AWA programme, businesses must address several key considerations.

Regulatory compliance is crucial. AWA models must be designed to adhere to local labour laws and financial regulations, ensuring compliance helps businesses avoid legal complications, thus protecting both employers and employees.

Data security is another critical consideration. In the digital handling of wages, protecting employee data through robust cybersecurity is of paramount importance. As AWA systems involve sensitive financial information, businesses must implement stringent security protocols to safeguard against data breaches and unauthorised access.

Debatably the most crucial step is employee education. It’s essential to clarify that AWA is not a loan, so shouldn’t be compared with payday lending or any other type of credit. Payday loans are often characterised by high interest rates with challenging repayment conditions. Whereas with AWA, workers can schedule already-earned funds to come to them upon demand without being charged interest or APR.

It’s also  important to distinguish between different types of AWA.  Direct-to-consumer AWA is often used as an option if a workplace doesn’t provide this benefit. When AWA is offered directly by a third party to the worker without employer involvement, that third party does not have complete access to the worker’s records. The third party may be relying on pay stubs provided by the worker or information provided by payroll platforms to determine how much pay can be advanced and the worker may be subject to fees for accessing funds. Additionally, non-employer-provided AWA can lead to greater regulatory scrutiny because the third party provider is not the employer and is advancing funds to the worker, so the transaction may be viewed as a loan.

Meanwhile, employer-integrated AWA can be offered directly by the employer to the worker as a benefit. With this option, there is an existing relationship which provides a sense of stability and security. Employer-integrated AWA is likely to be fee-free or low-fee for workers to access. And unlike the direct-to-consumer AWA model, employer-integrated AWA provides the total financial picture of what has been earned by the worker, with pay information coming directly from the employer itself, instead of a third-party. This type of transaction is not typically viewed as a loan.

Finally, employees should be made aware of how AWA can be used to enhance financial wellness. Integrating AWA with employer’s payroll systems ensures real-time access to accurate earned wage data, which can assist employees in managing their finances effectively while avoiding debt traps like payday loans. By offering an AWA solution through a modern card platform, employers can also access rich data and insights into how workers are spending, paving the way for advice-based notifications aimed at encouraging responsible financial behaviour, such as saving and budgeting. This data will also tell employers whether workers are experiencing money management challenges, and can enable conversations and strategies that are aimed at helping workers attain a more stable financial footing.

The Future Of Work Is AWA

As part of the embedded finance revolution, AWA plays a significant role in transforming how financial services are integrated into non-financial platforms, and through embedding AWA into payroll systems, companies are fundamentally changing the nature of financial interactions in the workplace.

By providing workers with faster access to their earnings, AWA addresses the financial challenges posed by today’s economy while offering businesses a powerful tool to improve employee satisfaction, retention, and productivity. As technology continues to advance, AWA is poised to become an integral part of the employment landscape, driving a more inclusive and responsive financial ecosystem for all.

Head of Solutions and Delivery, Europe at  |  + posts

Nick Holt joined Marqeta more than four years ago and is responsible for delivery and solutions, his role is to ensure partners have access to the very best technical solutions for payments, while enjoying the freedom and control to embed modern issuer processor functionality at the heart of their card programmes.