---
title: Would you pay for your own paycheck? Wage access apps think so
description: The growing popularity of wage access apps is the newest symptom of America’s shortcomings.
---

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# [Would you pay for your own paycheck? Wage access apps think so](https://hs-sbup.thehustle.co/news/would-you-pay-for-your-own-paycheck-wage-access-apps-think-so)

 Written by [Sara Friedman](https://hs-sbup.thehustle.co/news/author/sara-friedman) | Sep 21, 2023 7:35:47 AM

It turns out our personal finances are in as bleak a state as they feel.

More than [one-third](https://www.federalreserve.gov/newsevents/pressreleases/files/other20230522a1.pdf) of Americans say they couldn’t cover a $400 emergency expense in cash, and the average consumer has [~$5.7k](https://newsroom.transunion.com/q1-2023-ciir/) in credit card debt.

To shorten the time between paychecks, more people are turning to wage access apps — services that offer users early access to earned funds in exchange for a fee, per [*Vox*](https://www.vox.com/future-perfect/23863440/early-earned-wage-access-apps-payday-loans-regulation-earnin-moneylion-dailypay).

#### **The apps fall into two categories:**

- Programs integrated directly into [employer](https://www.nerdwallet.com/article/loans/personal-loans/what-is-earned-wage-access#:~:text=Companies%20like%20Walmart%2C%20Amazon%20and,deducted%20from%20your%20next%20paycheck.) payroll systems that let workers access their wages in advance before deducting from their paychecks.
- Direct-to-consumer apps that give people their money in advance based on what they say they’ll earn in the future.

The demand for both is rising: Consumers [obtained](https://aite-novarica.com/report/making-ends-meet-demand-pay-and-employer-based-loans) $9.5B through early wage access companies in 2020, up from $3.2B in 2018.

#### **But who uses them? And why?**

These apps are particularly [popular](https://advisory.kpmg.us/articles/2021/earned-wage-access-offers.html) among low-wage workers in industries like food service, gig work, and retail.

Their popularity hinges on the fact that workers are often not paid enough (the federal minimum wage is [$7.25](https://www.usa.gov/minimum-wage#:~:text=The%20federal%20minimum%20wage%20is,at%20least%20%247.25%20per%20hour.) an hour) or are paid too slowly.

And they aren’t used for unnecessary splurges: [80%](https://www.hks.harvard.edu/sites/default/files/centers/mrcbg/214_AWP_final_2.pdf) of consumers rely on the apps to pay for essential expenses like groceries, rent, and child care.

#### **There are plenty of issues**

Since wage access apps are essentially loans, they come with a heaping side of fine print — and fees:

- Unless an employer swallows the fees, users pay to access their own money. This can range from less than $1 to more than $20, depending on the requested amount.
- Between January 2016 and January 2023, workers filed 450+ complaints against wage access providers with the Consumer Financial Protection Bureau.

These fees add up quickly, and a recent [report](https://dfpi.ca.gov/wp-content/uploads/sites/337/2023/03/2021-Earned-Wage-Access-Data-Findings-Cited-in-ISOR.pdf?emrc=08148f) found fees for early wage access programs averaged an annual interest rate of more than 300%.

#### **Early wage access apps are new…**

… and [states](https://news.bloomberglaw.com/banking-law/states-set-collision-course-over-pay-on-demand-for-earned-wages) are still deciding how to regulate them. So far, Connecticut has passed legislation defining them as loans, and California is close behind.

Ultimately, all this discourse highlights the long-standing issue that low-wage American workers are often penalized when struggling to make a living wage.

[View full post](https://hs-sbup.thehustle.co/news/would-you-pay-for-your-own-paycheck-wage-access-apps-think-so)

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