BOSTON — Access to money when it is needed is becoming more important to U.S. households than earning higher returns on savings, as consumers navigate rising prices, higher borrowing costs and less predictable income, according to new research from PYMNTS Intelligence.
Data from the firm’s ongoing “Wage to Wallet” series, conducted with Ingo Payments and WorkWhile, shows that the timing of income — not just how much is earned — is increasingly determining whether households can meet financial obligations without turning to credit.
PYMNTS Intelligence reported that even small disruptions in pay cycles or wages can quickly reduce consumer spending and increase financial strain. In many cases, speed of access to funds outweighs the benefit of higher interest rates on deposits.
Speed Over Return
“Speed, rather than return, may be the operative variable,” the report found, noting that when bills arrive before paychecks, households face greater financial pressure.
The findings highlight the challenges facing what PYMNTS Intelligence calls the “Labor Economy,” a group of roughly 60 million workers earning less than $25 per hour.
The Findings
According to the report:
- These workers account for about 15% of total consumer spending
- Savings buffers are limited, making them highly sensitive to income disruptions
- A 0.81% decline in wages could translate into a $14 billion annualized drop in spending
- Despite higher interest rates boosting yields on savings accounts, PYMNTS Intelligence said those gains offer limited relief for households with thin liquidity.
The report found fewer than one in three workers in this segment could access $2,000 in cash within 30 days for an emergency. Meanwhile, more than one-third regularly carry revolving credit balances.
Mechanism for Avoiding Fees
“Access to funds becomes a mechanism for avoiding fees, managing volatility and maintaining spending stability,” PYMNTS Intelligence said, adding that yield becomes secondary unless liquidity is already secure.
The timing of wage payments is also shifting. PYMNTS Intelligence reported that payrolls have moved away from paper checks — declining from 34% to 17% over five years — while more workers receive funds instantly through bank accounts or cards.
A majority of workers choose instant or near-instant payments when available, even if there is a fee, the report said. Faster access to wages reduces reliance on high-cost credit and helps households manage expenses between pay periods.
Additional Findings
According to PYMNTS, the research also found a direct link between access to income and consumer behavior:
- Delayed income leads to reduced discretionary spending and increased borrowing
- More than one-third of workers carry revolving balances, averaging more than 22% of annual income
- Real-time access to funds helps stabilize spending and reduces the need for additional debt
- For financial institutions, the findings suggest a shift in competitive priorities.
Traditional Fis Vs. Fintech
PYMNTS Intelligence said traditional banks have long emphasized interest rates to attract deposits, while fintech firms have focused on speed through instant payments and earned wage access.
“The data indicates that speed is gaining ground as the more relevant value proposition,” the report said.
The firm added that real-time payments, instant wage access and on-demand liquidity tools are increasingly becoming core features, rather than optional services, as consumers prioritize immediate access to their money over higher returns.
