Enabling Financial Wellness and Killing Off the Payday Loan Industry

If you’ve ever had to live paycheck-to-paycheck, where you’ve been challenged to manage all of your financial obligations between pay dates, you know how stressful this can be. And it can be even harder to dig out, especially if you take a payday loan. 

Even individuals with stable employment may find themselves living paycheck to paycheck. This financial struggle can result from various factors such as limited savings, high living expenses, or unexpected financial obligations. In such situations, some may turn to payday loans to bridge the gap between paychecks and meet immediate financial needs. However, it’s crucial to acknowledge that relying on these loans often leads to a cycle of debt, emphasizing the importance of fostering financial resilience through savings and budgeting.

When an employee has instant access to earned wages through an on-demand pay solution, it helps to relieve this type of financial stress. Workers can access money as bills become due to meet their financial obligations and manage unexpected expenses, without having to add the additional stress of overdraft fees, late charges or payday loan fees and interest. Additionally, the transparency employees have into their accrued earnings allows them to make more informed decisions when it comes to earnings and their spending. For example, an employee may want to pick up an additional shift to meet their financial obligations and lifestyle choices, like having to buy a birthday gift for a family member.

According to a Lending Club 2023 Report, 62% of all American workers live this scenario every day and the toll that this takes on their mental health and productivity in the workplace is palpable. DailyPay recently commissioned an Arizent study to see how access to DailyPay helps employees achieve greater financial control. Here are the results of that survey.¹

• 93% of DailyPay users surveyed check their earnings activity to make spending and financial decisions.
• 80% of users surveyed say DailyPay has had a positive influence on their financial habits.
• Among those who previously incurred credit card interest charges, 62% have decreased the incurred charges since they started using DailyPay. 55% attribute the decrease to DailyPay.
• 72% of DailyPay users say that DailyPay helps them feel more confident in managing their finances. 
• 58% of users say DailyPay makes them feel more satisfied in their job.  

Top Transfer Reasons²

• Food and groceries (78%)
• Utilities (64%)
• Transportation and car insurance (54%)

They say a picture is worth 1,000 words. In this case, this video might just be worth 10,000 words. To understand how immediate access to earned pay helps employees, watch this video from our partner, DialAmerica, featuring real-life stories from several employees who share how having early access to their pay gave them greater control over their financial lives.