In the US, payday advances through apps cost nearly $208 a year — Fortune
In the United States, payday advances through apps that give workers access to part of their earned money before payday cost users nearly $208 a year on average due to fees and voluntary “tips.” This is reported by Fortune, citing a study by the Julian Bond Institute at the Center for Responsible Lending.
Fees in most advances
Researchers analyzed the bank transactions of 10,000 consumers and found that 96% of payday advances obtained through direct-to-consumer services involved fees or “tips.” On average, such payments amounted to about $17 per month, or nearly $208 per year.
Earned wage access, or on-demand pay, services allow users to receive part of their already earned funds before the regular payday. As of 2024, more than 10 million Americans had used such tools. According to 2022 data from the Government Accountability Office, they are mainly used by people with annual incomes below $50,000. Among the main reasons cited were paying for groceries and rent.
The apps do not require credit history checks and do not charge interest, but they may charge fees for fast fund transfers and subscriptions or offer users the option to leave tips. According to the Julian Bond Institute, for an average advance, the annual percentage rate including such payments reached 232% — roughly the level of traditional payday loans.
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Risk of accumulating short-term debt
A 2024 report by the US Consumer Financial Protection Bureau recorded a 90% increase in transaction volume in earned wage access services in 2021–2022. The transaction volume of such apps tripled between 2018 and 2020, from $3.2 billion to $9.5 billion, according to Datos Insights.
Tom Feltner, deputy director for consumer protection policy at Americans for Financial Reform Education Fund, said the risk lies not only in fees for a single transaction but also in using several financial apps at the same time. This, he said, may increase the risk of late payments. According to CFPB data for 2025, more than 60% of users of “buy now, pay later” services simultaneously had several such loans.
In 2024, the CFPB proposed requiring services to disclose tips and fees as finance charges when calculating the annual percentage rate. In December 2025, the bureau withdrew this proposal, determining that fees and voluntary tips are not finance charges.
