Many South Africans are battling the weight of high prices and stagnant incomes, and a growing number are forced to borrow simply to put food on the table.
Finmark Trust estimates that in 2024, three out of every four adults who took loans used the money to pay for essentials. The trend is worse among low-income earners who usually fall into the hands of costly micro-lenders and loan sharks.
TymeBank believes it has found a solution; in partnership with Deel Local Payroll, the bank is introducing Early Wage Access (EWA), a service that allows workers to withdraw part of their salaries before payday.
Unlike traditional credit, EWA does not saddle employees with interest or repayment obligations. Instead, it lets them access wages they have already earned, reducing their dependence on high-interest loans.
Jarred Deacon, head of Growth at TymeBank ZA, explained the reality employers face. “Corporates spend a lot of their time managing resources, so our teams are inundated with requests from either lending or trying to understand how to manage people’s cash flow. We have many examples where people come through and see how they can access some portion of their money if they have a medical emergency or if they have some type of financial distress. They try their best to really fix that issue.”
EWA has been around for more than a decade. In the United States, over seven million workers used it in 2022, moving about $22 billion in transactions. Major companies such as Walmart and McDonald’s now make it available to staff, and employees increasingly expect the flexibility of drawing wages early.
In South Africa, TymeBank and Paymenow are at the front of this movement, and Deel Local Payroll is providing the cloud technology to make the early wage access process seamless.
“EWA is a modern fintech product. It uses automation and API integration to streamline the underlying processes, making access easy while taking care of regulatory requirements. By using a cloud-native payroll platform such as ours, financial institutions extend EWA services to businesses and their employees. It’s fast, safe, and keeps overheads low,” said Warren van Wyk, director at Deel Local Payroll.
Concerns about whether workers might misuse the service remain, but so far the evidence suggests otherwise. According to Paymenow, the average worker only withdraws around 10% of their salary ahead of payday. Employers usually set limits, capping withdrawals at between 25% and 30% of earnings.
This level of restraint distinguishes EWA from exploitative credit systems where repayments and hidden charges quickly multiply. More importantly, it provides relief for workers who might otherwise spend hours at work distracted by their financial struggles. In reducing that stress, companies can also gain from improved productivity and employee wellbeing.
For many South Africans, the choice is between an exploitative loan or waiting until payday to cover emergencies. EWA offers a middle ground that gives workers control without trapping them in debt. “It’s amazingly seamless,” Van Wyk added.
“In some examples, employees can access funds through USSD menus or apps on their phones, and the financial service provider handles most of the due diligence and compliance, not the employer. We’ve often heard that digital innovation can democratise finance for more South Africans. EWA is an excellent example of that promise in action.”
