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Tuesday, May 28, 2024

How EWA financial education is empowering consumers to make better financial decisions

In an environment of continued hardship for consumers – with high inflation, rising costs of living, and high interest rates punishing borrowers – the consequences of bad financial decisions can be disastrous. 

This makes financial education programmes, such as that offered by South Africa’s leading earned-wage access (EWA) provider Paymenow, so crucial. Paymenow is a financial wellness and inclusion platform that allows employees to access a percentage of their accrued wages before the typical payday. This service is designed to address cash flow challenges, bolster users’ financial security, and promote employee retention. A core element of this is free in-app financial literacy training, which allows users to upskill themselves.

“A core element of the Paymenow offering to users is the free in-app financial literacy training and our EWA programme is founded on the principles of responsible financial management, promoting financial literacy and responsible usage,” says Denise Neethling, Head of Marketing at Paymenow. “Paymenow’s EWA offering includes financial education on the basics of personal financial management. We teach users about budgeting, saving and smart credit options, among other things, to encourage smart spending habits and promote prudent financial choices. Paymenow combines this with a unique, gamified approach that incentivises users to upskill themselves and ultimately encourages better financial behaviour.” 

Paymenow offers users a choice between accessing a portion of their already earned but unpaid wages in cash or  vouchers for necessities. This includes groceries, clothing, electricity and medical services. Vouchers can be used with a range of popular retailers, including  Pick n Pay, Shoprite, Dis-Chem, Game, Makro, Pep and more. 

Due to Paymenow’s bulk buying power, Neethling explains the company is able to offer vouchers at significantly cheaper fees compared to other providers. Paymenow users who have completed the financial education and have reached Gold status can buy vouchers completely free of fees. In light of this, Paymenow considers users choosing voucher purchases over cash-outs a sign of increased financial literacy. “And the great news is, our usage data shows the more financial-education modules a user completes, the more likely they are to choose vouchers over cash, showing how the education programme leads to better financial decisions.”  

To encourage responsible usage of the platform, Paymenow’s financial education system is tiered. Users gain increased access to their earned wages as they complete financial literacy training and progress through the tiers . Each tier also gives the user  increasingly lower fees, incentivising responsible financial management and further encouraging financial literacy. Roughly two-thirds of Paymenow’s rapidly growing user base has reached the highest (gold) tier. 

By weaving financial education into its EWA programme, Paymenow empowers users to become financially independent, reducing their financial stress and building financial resilience. As a result, a significant majority of Paymenow users (94%) reported an increase in their quality of life after using the platform, and 95% of Paymenow users experienced a reduction in financial stress, demonstrating the platform’s positive impact on users’ financial well-being.

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