Millions of American workers are caught in the vicious cycle of debt because of reliance on payday loans and/or over-drafting their bank accounts and paying costly overdraft or NSF fees to pay bills and make ends meet.
However, according to new research from the Aite-Novarica Group, having access to one’s pay as you earn it can eliminate these financially crippling options used to survive paycheck to paycheck for an overwhelming majority of people stuck using these predatory alternative financial services.
DailyPay partnered with the Aite-Novarica Group, well-respected financial industry research and advisory firm, to independently conduct research on its on-demand pay customer base.
The research confirms that DailyPay and its proprietary approach to on-demand-pay (sometimes known as earned wage access), offering employees 100% immediate access to their funds easily and reliably, is a remarkably effective alternative to expensive financial alternatives like payday loans, overdraft fees, late fees and the like. The research also shows DailyPay can stop reliance on regularly borrowing from friends and family to make ends meet, reduce financial stress and improve overall employee financial wellness.
Key Findings are as follows:
- More than eight out of 10 (82%) respondents that access their DailyPay BalanceTM on-demand said they worry about money less since they started the program.
- 75% said they are able to budget and plan better with the ability to access their earnings on-demand.
- 95% previously reliant on payday loans in any way either stopped using payday loans (81%) or reduced use (15%) after using DailyPay. Nearly nine out of 10 (88%) of those responding said that they stopped or reduced use of such loans because of DailyPay.
- The Aite-Novarica Group conservatively estimates that frequent payday loan users save between $624-930 annually using DailyPay.
- 97% of those that said they overdrew their bank account prior to using DailyPay now rarely or never suffer overdraft fees (79%) or report experiencing fewer instances of overdraft fees (18%) after using DailyPay. 75% credit DailyPay for this reduction in overdraft charges.
- The Aite-Novarica Group conservatively estimates that frequent over-drafters save $660 annually using DailyPay.
DailyPay users also report being able to better manage their bill and loan payments and reduce requests for help from friends or family.
- 88% had less trouble with bills and loan payments after using DailyPay.
- 94% give credit to DailyPay for this change to make/bill loan payments.
DailyPay reaps positive outcomes across the board for users as the product has caused them to worry less about money (82%), improved their ability to budget and plan (75%), and allowed them to reduce debt (60%), and those who tend to use DailyPay relatively more frequently report even higher average savings and even more extensive prior reliance on inferior, predatory alternatives.
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