Early wage access – Providing more value to members

by Tom Bennett, PSCU

In our previous blog on direct deposit, we focused on how its value contributed to record growth in debit volumes, as well as its importance to primacy with members. While Automated Clearing House (ACH) continues to be the primary platform that payroll funds cross, the value a credit union receives from money flowing into an account is applicable to other situations. Credit unions should consider the value of money flowing into an account in their design of products and services in order to help their members stay financially healthy, as well as to stay competitive with larger financial institutions.

Over the past few years, focus in the fintech field has led to a number of advances in financial services, all capitalizing on a “weakness” in the existing value exchange with members. Some of these advances include:

  • Buy Now, Pay Later (BNPL) capitalizes on credit card intricacies and allows consumers to pay over time without adding interest-bearing balances to their account
  • Early paycheckaccess, posts ACH deposit files when received (typically two days early), with minimal risk versus waiting until a future date, and benefits consumers by providing quicker access to their funds

 

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