Israeli fintech pitches new concept for Philippine banks

MANILA, Philippines — An Israeli financial technology company is in advanced talks with Philippine banks to introduce a concept that enables employees to access their salaries before payday and release their already earned wages with a click of a button.

PayKey said it is in talks with some leading banks in the Philippines and plans to introduce the first Earned Wage Access (EWA) app in the local market in early 2022.

Roy Gabriel, chief innovation officer and general manager of PayKey, said the concept that people get paid once or twice a month on payday has been in place for many years.

“It’s a very outdated way of looking at how salaries are paid. If they need money to pay bills and other unanticipated expenses, especially amid the new normal, they need to find another solution,” Gabriel said.

In the Philippines, Filipinos would ask for an advance or ‘bale’ from their employers, or even borrow from their family and friends, or take a loan from external lenders.

“All these happen because they’re waiting for their payday even if they already have worked and earned their money. Employees have this money but cannot access it even when they need it. It’s a very archaic way of looking at employees and salaries and, we want to change that by empowering them through EWA,” Gabriel said.

With the end-to-end, white-labeled EWA solution that banks could offer to their corporate clients, employers could include it as an employment benefit to their Filipino workers.

The EWA concept is now fast becoming a global trend, giving employees or workers access to their accrued salaries on any given day of the month so that they can use it to pay any immediate expense if they wish in only a matter of seconds.

The concept of EWA has been known and used in the West for some time now. In fact, in 2017, Walmart decided to implement this for all its workers with the help of an external fintech company.

If an employer offers EWA to his employees, their staff could simply go into the app to see how much money they earned to date and request an advance on salary via the app.

Since PayKey’s EWA feature allows them to transfer the funds to their linked bank account immediately, they could expect the money to be credited as soon as the payment has been confirmed.

A recent study published by Visa revealed that 84 percent of the 1,000 surveyed participants “worry about finances while at work,” and 68 percent indicated that financial worries truly affect their health and productiveness.

The same survey indicates that more than eight out of 10 employees spend time at work thinking about or dealing with finances each week.

“Simply put, everyone earns with EWA. The employer gets a happier, more productive worker, the employee feels less stress and is taking control over his life, and the bank gets to offer a new product in the salary arena. This is an area where we did not see any innovation in such a long time,” Gabriel said.