Labor Economy Workers Make Digital Wallets Their Banks

The Labor Economy is a group of about 60 million essential workers who keep the service and supply systems in the United States moving.

Most earn $25 an hour or less, and together they account for roughly 36.5% of total employment and 15% of consumer spending, or more than $1.7 trillion each year, according to PYMNTS Intelligence’s “Wage to Wallet Index,” published Monday (Oct. 27). Their earnings shape the flow of goods, services and household demand across the economy.

These workers are also helping digital wallets move into daily financial life. A paycheck deposited directly into a wallet or linked account is increasingly the starting point for a series of connected activities that include paying bills, saving, borrowing and investing. The same platforms that deliver wages are now helping consumers manage every dollar that follows.

The Financial Pressure Driving Change

The “Wage to Wallet Index” shows how fragile many Labor Economy households remain. Average liquid savings total $5,737, below the $9,869 average across all consumers. Fewer than 1 in 3 could handle a $2,000 emergency within 30 days. Small disruptions in pay schedules translate quickly into reduced spending. A 1% wage change across this group moves gross domestic product by roughly $17 billion. Those statistics demonstrate how essential wage continuity and rapid pay access have become for household stability and the broader economy.

The report finds that 55% of these workers choose instant wage access when it is offered, often paying a small fee to receive money within 30 minutes. PYMNTS data shows that instant pay reduces reliance on high-cost credit and helps smooth consumption between pay cycles. Faster pay, in effect, becomes a financial stabilizer.

The Wallet as Operating System

Once money arrives, digital wallets have evolved from simple storage tools into full-service hubs that unify direct deposit, bill payment and spending.

Real-time data within these wallets gives providers visibility into income timing and spending behavior, which allows them to deliver personalized savings nudges, budgeting tools and microcredit options that adapt to each user’s cash flow rhythm.

For workers who depend on reliable income, this structure provides control and continuity. Paychecks can be automatically split across savings and spending categories, debit credentials can be added for bill pay or subscription management, and rewards or installment features can be accessed immediately without leaving the wallet.

Block and the Cash App Ecosystem

There will be more detail amid the ongoing earnings season, but in evidence of the synthesis of wallet-driven ecosystems, PYMNTS’ coverage of Block’s second-quarter 2025 earnings results highlighted how far the company’s wallet strategy has advanced. Cash App’s direct deposit base continues to expand, with a growing share of users routing their full paychecks into the platform. Once the deposit is made, users gain access to an integrated suite of services, including Cash App Card, Cash App Savings, Cash App Investing and Cash App Borrow. The app’s internal data engine uses these deposits to surface personalized credit limits and savings recommendations.

During an Aug. 7 earnings report, Block executives described Cash App as a “financial operating system for the next generation” that helps individuals track income and spending in real time. More than half of active Cash App users use additional products beyond peer-to-peer payments, evidence that paycheck connectivity is strengthening product stickiness and retention. Block’s banking actives hit 8 million in June under a broader definition of account usage, up 16% year over year. Borrow, Cash App’s short-term loan product, grew originations 95% to $18 billion on an annualized basis.

SoFi’s Expanding Financial Loop

SoFi’s first-quarter earnings results showed that debit and credit cards and SoFi Money accounts linked to payroll deposits received higher annual percentage yields and unlocked additional credit benefits within the SoFi ecosystem. Management has said that most new SoFi Money customers set up direct deposit within 30 days of opening an account. Those recurring deposits feed SoFi Invest and SoFi Credit, creating a closed system of deposit, spend, borrow and invest under one digital roof.

The company’s strategy is to own the primary financial relationship by using data from recurring income flows to tailor offers across lending and savings. That approach aligns with the “Wage to Wallet Index” finding that real-time wage and transaction data strengthen personalization and resilience.

Wallet Expansion Across the Industry

PYMNTS’ coverage of PayPal has detailed new savings and credit features inside its app that rely on verified income credentials, allowing users to manage everyday purchases and installment payments in one place. During PayPal’s second-quarter earnings call in July, CEO Alex Chriss discussed PayPal World, a platform that promises to let any participating wallet pay any PayPal merchant.

“Five of the largest digital wallets in the world—PayPal, Venmo, Mercado Pago, Tenpay Global and UPI—are coming together on a seamless global platform so you can now use your preferred wallet anywhere in the world,” he told analysts, calling the move “a game changer for our branded experiences.”

The Broader Economic Impact

The “Wage to Wallet Index” frames these innovations in macroeconomic terms. When pay is reliable and accessible, consumption remains steady. When pay is delayed, spending stalls. The report estimates that wage interruptions within the Labor Economy can result in annualized declines of $30 billion to $40 billion in consumer spending, while periods of wage acceleration can add $20 billion to the economy. These fluctuations show how technology that speeds and stabilizes income access has ripple effects beyond individual households.

Looking Forward

Upcoming earnings from Block, SoFi and others will reveal how much of the Labor Economy’s financial activity now runs through wallets rather than traditional banks. For millions of workers, digital wallets are no longer peripheral tools; they are the central interface for earning, saving and spending.