Responsible financial assistance to retail workers

by Deon Nobrega & Bryan Habana. The recent riots and looting have affected the local retail industry particularly badly as malls and retailers were heavily targeted. For workers in a sector hard hit by the COVID-19 pandemic, this is heaping financial pressure on top of financial pressure. Employers can help their employees recover faster, however, using a relatively new employee benefit called earned wage access (EWA).

Retail workers have been dealt heavy blows with reduced employment, employment uncertainty and now the destruction of the places that provide their livelihoods. Many of them are low earning employees who cannot afford to absorb the impact of reduced or uncertain wages for any length of time. This is where responsible earned wage access can assist. EWA is a service that Paymenow provides to local employers. Once an employer has signed up, they can allow their employees to access already earned wages, up to a fixed amount (usually 25%) of their monthly wages, for a much lower fee than is offered by financial services companies or payday loan sharks.

Avoiding payday loan sharks

This gives employees their dignity back as they do not need to ask employers for loans or – worse – go to the ‘50 percenters’ for payday loans with exorbitant interest rates and fees (usually 50%, hence the moniker) and trap workers in a never-ending spiral of debt. The service is free to employers, and advances are paid by Paymenow so it doesn’t impact employer cash flows. Employees can reduce their service fees and gain extra benefits by going through the financial wellness program embedded in the mobile app. Through gamification, workers are taught how to take control of their finances and move from a debt to a savings mindset.

Globally, EWA has been adopted by big players like Walmart, Pizza Hut and Virgin Care. Locally, the likes of integrated facilities management provider Bidvest Services, retail solutions provider Smollan, fast food business Hungry Lion, and transport logistics company GLS Supply Chain, are seeing the benefits. And a recent survey conducted among Paymenow users found 82% of employees feel more in control of their finances thanks to having access to earned wages. The research showed that earned wages access helped 40% of respondents handle emergencies better.

At a time when the official unemployment rate is 32.6%, far too many people have far too many mouths to feed, and emergencies are not something that the ordinary household can cope with. EWA offers a way for employers to help their employees weather the tough times and improve their financial outlook for the future.

Main image credit: Photo by Konstantin Evdokimov on Unsplash.

Deon Nobrega, managing director and Bryan Habana, business development head, of Paymenow, aim to ease the burden inflicted by payday and micro lenders through affordable, real-time, access to cash and to educate and assist South Africans to reach their financial goals. Paymenow is a fintech company offering a financial wellness and inclusion platform that allows employees responsible earned wage access through the Paymenow mobile app. The platform promotes responsible financial behaviour and encourages saving.

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