Rising living costs are pushing many South Africans into debt traps, with households increasingly relying on credit just to survive. A 2024 survey by Finmark Trust revealed that 75% of adults who borrowed money last year did so to pay for essentials such as food, a trend that has left millions vulnerable to high-interest loans and exploitative micro-lenders.
But a new financial innovation, Earned Wage Access (EWA) is offering relief. The service allows employees to withdraw part of their salaries before payday, reducing dependence on loan sharks and expensive credit.
“Instead of waiting until the 25th, employees can draw down what they’ve already earned when they need it most,” explained Jarred Deacon, Head of Growth at TymeBank ZA. “It’s about empowerment and financial dignity.”
Unlike traditional loans, EWA does not involve borrowing or interest charges. Instead, funds are accessed directly from an employee’s accrued wages and transferred into a designated account or issued as retail vouchers. The model first took root in the United States, where companies like Walmart and McDonald’s offer it, with over 7 million workers using EWA for $22 billion in transactions in 2022.
Now, South African employers are beginning to embrace the system. TymeBank has partnered with Deel Local Payroll to integrate EWA into PaySpace, a cloud-native payroll platform that automates and secures transactions.
For employees, the appeal lies in avoiding high fees charged by micro-lenders, who can legally demand up to 5% monthly interest plus administration costs. For businesses, the benefit comes in improved staff morale and productivity, as financially stressed employees spend fewer hours worrying about money while at work.
“EWA is not just a product; it’s a responsible financial alternative,” said Warren van Wyk, Director at Deel Local Payroll. “On average, workers only draw around 10% of their wages early, and employers can set caps to ensure responsible use.”
With inflation biting, financial stress is no longer just a household problem, it’s an economic one, affecting companies and national productivity. EWA is emerging as a tool that could ease the financial pressure on South African workers, support employers, and demonstrate how fintech can create inclusive solutions for today’s toughest challenges.
