This article first appeared in Digital Edge, The Edge Malaysia Weekly on April 14, 2025 - April 20, 2025

Earned wage access (EWA) can improve workers’ financial well-being, with 80% of users reporting a better quality of life and 78% using it for household expenses, according to a survey by 60 Decibels and the International Labour Organization (ILO).

The findings, released on March 24, were based on a qualitative, user-centric study conducted on home-grown EWA provider Paywatch, exploring how users perceive and experience its service, including accessibility, usage, benefits and potential risks in Malaysia.

Supported by banks and companies’ human resources teams, the start-up’s EWA is offered as an employee benefit, allowing workers to access a portion of their earned wages before payday via its app, for a flat transaction fee of RM2. Unlike a loan or insurance, the funds accessed through EWA are part of the employee’s already earned basic salary.

Paywatch partners with companies to determine how much of their wages employees can access (even after just one day of work), thus offering greater financial flexibility. The study tracked Paywatch’s clients over the past six months in 2024, examining EWA usage frequency, user demographics and how the funds were spent.

Highlights from the study show that 57% of employees reported reduced financial stress, 51% gained greater control over their finances and 49% relied less on payday loans or salary advances. Usage patterns revealed that 56% used EWA more than once a month, 14% more than once in some months, 21% once a month and only 9% used it less frequently.

The study found that EWA usage was primarily for household expenses, followed by emergency household needs (39%), work-related costs (30%), emergency health expenses (17%), debt repayment (13%), asset purchases (1%) and miscellaneous uses (3%). 

Key long-term benefits included 36% of users increasing their savings and 30% reducing household debt. While 60% reported no change in savings, 4% saw a slight decrease.

Overall, EWA contributed to improved quality of life and enhanced employer-employee relationships. Notably, 41% reported a better relationship with their employer and 46% considered EWA a key factor when evaluating job opportunities.

“It is crucial to also consider the risks and ensure responsible implementation of EWA models. We look forward to collaborating with providers, regulators and employers’ and workers’ organisations on policies and practices that protect and empower workers globally,” said ILO technical officer Andrej Slivnik during a panel discussion on the wider implications of EWA and its impact on the workplace.

While the benefits of EWA were widely acknowledged, panellists stressed the need for safeguards and transparency to ensure responsible use and protect employees.

Paywatch co-founder and president Alex Kim stressed the importance of engaging employers. He noted that demonstrating the business case for EWA is key, alongside working with companies to set limits on how much of their wages employees can access — ensuring they don’t spend most of their earnings before payday.

These guard rails aren’t solely the responsibility of policymakers but must also be shaped by employers, said Kim.

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