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Payfare announces intention to expand into earned wage access market

Payfare, a Toronto-based fintech powering instant payout and digital banking solutions for the gig workforce, has announced its intention to expand into the earned wage access (EWA) market.”As a pioneer of providing instant pay after every task and rewards-rich loyalty programs for gig economy workers, Payfare intends to use its technology forward card issuance and digital wallet platform to provide employees access to the same benefits in both the United States and Canada,” it said in a press release.

It said the opportunity is “significant,” with a total addressable market (TAM) in the United States of more than 131 million people earning less than $75,000 annually, over 78 million hourly wage workers, and 12 million people drawing on payday loans once a year.

In Canada, more than 22 million people earn under $75,000 annually. Personal budget shortfalls are an important issue as 44% of workers have less than $500 saved for unexpected expenses on essential items such as gas, groceries, rent, and utility bills.

“Payfare believes simply providing access to wages that have already been earned can assist workers in this scenario while reducing reliance on predatory consumer credit products,” it said.

Employers that offer EWA programs to their workers also realize benefits in increased worker retention and satisfaction, it said.

About 76% of workers believe it is important that their employer provides access to EWA, and 79% would consider switching to an employer with an EWA program. Offering such a benefit can improve the financial health of employees, while improving engagement and productivity, it said.

“We don’t believe payday loans should exist in the modern world with real time integration to payroll records as well as the capability to repay at source,” said Marco Margiotta, CEO and Founding Partner of Payfare. “We have built an award-winning digital banking product7 that has helped our gig platform partners reduce their worker acquisition costs and boost productivity. Providing these same benefits to employees and employers is a massive opportunity set ahead of Payfare with a TAM of over 131 million people in the US. We look forward to sharing progress on our expansion into EWA over the course of 2023.”

Payfare is a global financial technology company powering digital banking and instant payment solutions for today’s gig workforce. Payfare partners with leading platforms and marketplaces, such as Uber, Lyft and DoorDash, to provide financial health for their workforce.