Home Fico score New research from Aite-Novarica Group: Pay-as-you-go eliminates payday loans and overdraft fees for millions of American workers

New research from Aite-Novarica Group: Pay-as-you-go eliminates payday loans and overdraft fees for millions of American workers



August 11, 2021 Millions of working Americans are caught in the vicious cycle of debt due to their addiction to payday loans and paying expensive overdraft fees to pay their bills on time and make ends meet. However, according to new research from the Aite-Novarica Group, having access to your paycheck as you earn it can eliminate those crippling financial options for surviving paycheck to paycheck for an overwhelming majority of people. who are blocked using these predatory financial services. Research* confirms that DailyPay and its proprietary pay-as-you-go (sometimes referred to as earned pay access) approach, giving employees 100% immediate access to their funds in a simple and reliable way, is a remarkably effective solution to financial alternatives expensive like payday loans. , overdraft fees, late fees, etc. Research also shows that DailyPay can stop relying on regular borrowing from friends to make ends meet, reduce financial stress, and improve overall financial well-being. Aite-Novarica found that using DailyPay improves worker financial outcomes for a large majority of users. More than eight in 10 (82%) respondents who access their DailyPay Balance™ on demand said they were less worried about money since starting the program, and 75% said they were able to better budget and plan with the ability to access their income. on demand. And those numbers generally hold for those who use pay-as-you-go more frequently, including those who use larger percentages of their wages before payday, according to the survey results. “Survey respondents were using expensive and arguably inferior alternatives before gaining access to DailyPay,” said Leslie Parrish, Principal Analyst, Aite-Norvarica. “These consumers feel significantly more in control of their finances after using DailyPay.” The main conclusions of the research report are as follows:

  • The vast majority of former payday loan and overdraft users have been able to move away from these suboptimal behaviors and most of them attribute this change to DailyPay.
    • The Aite-Novarica group conservatively estimates that frequent payday loan users save between $624 and $930 per year using DailyPay.
    • 95% of those who previously relied on payday loans in any way stopped using payday loans (81%) or reduced their use (15%) after using DailyPay. Nearly nine out of 10 respondents (88%) said they stopped or reduced the use of these loans because of DailyPay.
    • The Aite-Novarica group conservatively estimates that most overdrafts save $660 per year using DailyPay.
    • 97% of those who said they had overdrafted their bank account before using DailyPay now rarely or never incur overdraft fees (79%) or say they have experienced fewer instances of overdraft fees (18%) after using DailyPay. 75% credited DailyPay for this overdraft fee reduction.

  • 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 fewer problems with bills and loan repayments after using DailyPay.
    • 94% credit DailyPay for this change in making/charging loan payments.

  • DailyPay is reaping positive results across the board for users as the product made them worry less about money (82%), improved their ability to budget and plan (75%), and enabled them to reduce their debts (60%) and those who tend to use DailyPay relatively more frequently report even higher average savings and an even greater prior reliance on inferior and predatory alternatives.

“These data are transformational and support a very important conclusion – DailyPay helps American workers stay out of debt,” said Mattew Kopko, vice president of public policy, DailyPay. “Thanks to DailyPay, 4 out of 5 payday loan or overdraft users are freed from the cycle of debt, with most of the remaining 20% ​​enjoying substantial financial benefits. People are clearly saying that they need this simple and reliable service to make ends meet. For a more detailed look at the study, visit http://www.dailypay.com/aite-report.

*Industry leader DailyPay has partnered with Aite-Novarica Group, a highly respected financial industry research and advisory firm that focuses on financial matters, to independently conduct customer research payment on demand.

Aite Novarica’s online survey of 1,114 DailyPay customers was conducted in May 2021. 95% confidence interval with a margin of error of 3 points


About DailyPay: DailyPay, powered by its cutting-edge technology platform, is on a mission to create a new financial system. Partnered with top US employers, including Dollar Tree, Berkshire Hathaway and Adecco, DailyPay is the recognized benchmark for on-demand payment. With its vast data network, proprietary funding model and connections to over 6,000 banking system endpoints, DailyPay ensures that money is always in the right place at the right time for employers, merchants and financial institutions. DailyPay develops the technology and the mindset to reinvent the way money moves, from the start of work. DailyPay is headquartered in New York with operations based in Minneapolis. For more information, visit www.dailypay.com/press. About Aite-Novarica Group: Aite-Novarica Group is a consulting firm that provides essential technology, regulatory, strategy and operations insights to hundreds of banks, insurers, payment providers and investment firms, as well as technology and service providers. who support them. Comprised of former senior technology, strategy and operations executives as well as experienced researchers and consultants, our experts provide practical advice to our clientele, leveraging the deep insights developed through our extensive network of clients and consultants. other industry contacts. Visit us on the web and connect with us on Twitter and LinkedIn.