Before earned wage access became a fintech category, restaurant workers had a simpler version of it: finish a shift, collect tips and go home with the money they earned that day.
Cashless payments have disrupted this routine. Restaurant workers still expected their tips at the end of a shift, but fewer customers were leaving cash to pay them.
Enter digital tipping. Atif Siddiqifounder and CEO of earned wage access provider branchCEO Karen Webster recently told PYMNTS, restaurants helped push Brunch to go digital several years ago for precisely this reason.
“Most people don’t pay with cash, and there’s not enough cash at the end of the day to tip their workforce,” Siddiqui said. “The main reason they work there is so they can still access those same-day tips.”
The problem now extends beyond restaurants. Gig platforms have conditioned workers to expect a closer connection between completing work and receiving money. My friend pointed to Uber drivers who can finish a trip and get paid immediately, an experience that helped shape expectations among other workers. Branch is also seeing demand for electricity, water and related products among higher income groups as household costs put pressure on a wider range of income earners.
However, access does not necessarily translate into habitual use. Branch typically sees EWA adoption at 10% to 20% across different groups, and the workers who use it can change from time to time, Siddiqi said.
“They’re really using this as a way to just take advantage of emergencies rather than relying on access to earned pay consistently over time,” he noted, citing unexpected expenses and bills that arrive at inconvenient points between paychecks.
Webster raised the flip side of these numbers: Choosing not to withdraw wages early can say something about a worker’s financial situation. “Using it means you’re feeling stressed for whatever reason,” she said, noting that the Electricity and Water Authority can provide an alternative when other options include overdrafts, late fees or payday loans.
Branch came to a similar conclusion early in its development, my friend said. “If we do our job right, people should use access to earned wages less over time,” he said. This premise helped lead Branch to add saving, budgeting and cashback features to his portfolio because EWA addresses the immediate cash flow shortage rather than the financial circumstances behind it.
Giving workers more ways to receive wages
Addresses of the new branch flex model A different constraint: introducing EWA into software that employers and workers already use.
The model targets vertical software, scheduling, recruiting, and workforce management platforms that own hiring and work activity data. Instead of requiring deeper time and attendance integration tied to a branch’s core EWA offering, Flex can be included as a component within those existing applications. Workers can then see wages earned and request access without downloading another app.
Flex is also changing delivery options. The branch has historically channeled free EWA instant service through its digital wallet. Workers using Flex can send money to an existing financial institution immediately for a fee or wait two days and receive it without a fee.
Siddiqi noted that need determines the delivery option, while Branch’s current model has seen the vast majority of users take funds through its wallet.
The wallet also supports other forms of worker payments. Siddiqui said 75% of Branch’s business clients use the platform for at least two purposes, including digital advice and contractor and commission payments.
“It’s almost like an exchange,” Webster said, describing the employer sending money that’s already owed to the employee. She noted that disbursement products routinely offer recipients a choice between immediate paid delivery and slower, free delivery, while payroll adds account and compliance requirements before payment is made.
These requirements remain significant. Siddiqi cited Branch’s experience with tip aggregation, where rules vary by geographic region, and requires the company to build technology around the accounting and compliance that precedes payment. Payroll presents similar complexities, he said.
For Siddiqui, faster access leaves the industry with a long-term challenge. Branch is working on savings products aimed at helping workers build a $400 or $500 reserve and is exploring ways to help invisible credit users build credit histories.
“In addition to earning wages, it is also important to help them build some kind of financial support,” Siddiqi added.
Watch the interview
a witness FULL TV CONVERSATION FROM PYMNTS With branch founder and CEO Atif Siddiqui to hear more about:
- Why financial institutions examine EWA for SME banking customers and consumer banking customers.
- How the economics of corporate payroll, including flotation, can impact the business case for paying wages faster.
- Why collecting tips requires a compliance layer before the money can move.
- How Income and Spending Statements Can Help Credit-Invisible Workers Get Started Building a Credit History.
