Payday loan apps, often marketed as Earned Wage Access (EWA) products, present themselves as alternatives to storefront payday lending that help promote financial inclusion. In practice, they function much like traditional storefront payday lenders, worsening wealth and income disparities by charging steep fees, encouraging repeat borrowing, and reducing future paychecks. Our research shows that the average APR for loans repaid in 7 to 14 days was 383%, comparable to the 391% rate of a typical storefront payday loan.
Read our joint policy brief with the NAACP that examines the harms payday loan apps cause consumers, particularly Black and Latino borrowers, the ways these communities are targeted, and provides a guide to better solutions.