[IMTDb]

> People who are not making enough money to make ends meet [...] don't need to get paid faster. They need to get paid more.

Or they need to pay less. If the cost of being poor represents a significant fraction of the total spending for these people, lowering that through arbitrage is still a benefit.

I mistakenly went negative once on one of my bank accounts (purely due to sheer laziness/inattention), I was amazed by how expensive that small mistake was. People who are unfortunate enough to have than happen regularly spend a lot on those fees, especially compared to their almost non-existent disposable income. Anything that can help/reduce those expenses is a win in my book.

[IceDane]

You're neglecting the fact that they will also have expenses the month after, and the month after that. Tapping into their income faster just means that this month's bill gets covered by their salary, but next month's bill goes on credit.

If anything, this product is bad like credit cards and overdrafts, in that it will enable people to make financially unsound decisions while feeling like they can actually afford it, when they can't. They're just burning the candle at the other end.

[dumbfoundded]

For ease of numbers, let's say you make $100/week and have to spend $90/week on personal expenses.

If you get paid once every 2 weeks, you have: Week 1: -$90 Week 2: +$20 Week 3: -$70 Week 4: +$40 Week 5: -$50 Week 6: +$60 Week 7: -$30 Week 8: +$80 Week 9: -$10 Week 10: +$100

So it takes you 9 weeks before you never go negative and to be able to afford to take the job, you need $90.

If you get paid everyday, it's: Week 1: +$10 Week 2: +$20 Week 3: +$30 Week 4: +$40 Week 5: +$50 Week 6: +$60 Week 7: +$70 Week 8: +$80 Week 9: +$90 Week 10: +$100

It's clearly nicer to get paid everyday all else being equal.

[IceDane]

Yes, you're absolutely right. If we set up a perfect example to support your arguments, and we ignore any possible negative aspects, then we can conclude that this is a purely beneficial arrangement.

Look, I'm not arguing that it can't be useful to have the ability to get paid daily sometimes, but I don't buy into this schtick about this company doing this in some attempt to help the poor, because literally the opposite is happening.

A more realistic picture goes something like this:

In the middle of the month with only $200 in your account, you get hit with a $400 car repair bill. Instead of having overdrafts or text message money lenders, you can now borrow from your future salary via this company. You do this, cover your bill.

Now it's $next_month and you just got paid $400 less. If you were $200 in plus in the middle of last month, it doesn't seem far-fetched that you'll be in a similar situation this month, which means you're already at -$200, but you just don't know it until the middle of the month.

So what do you do now? Do you borrow from your salary again and repeat this process? Maybe, but then go back to step 1.

An interesting related tidbit is the fact that poor people are actually more likely to make bad financial decisions(and health and etc) and there are numerous studies showing this.

The only thing this product is doing is handing the poor yet another instrument to create financial trouble for themselves, under the guise of helping them. I can also frame it like this: How is this any different than if this company instead just offered "no nonsense loans" at only a 2% interest? Hint: There is zero difference, except in terms of risk for the company. The genius of this arrangement is that they never have to worry about people not paying off their loans.

[dumbfoundded]

I think your last point makes your true beliefs clear. You believe it's better for the poor to have a forced savings account (or as I call it a loan to the employer) so that they can't "make bad financial decisions". It's extremely paternalistic to believe the poor shouldn't have immediate access to all of the money they've earned or at least a choice of when to do so.

Of course there should be legal limits as to what interest rate can be charged. I don't believe anything more than 10% on an annualized basis can be justified.

In any case, the vast majority of your points in this discussion are irrelevant and the most potent point you make seems to depend on either interest rates not be fair or the poor being too irresponsible to get their deserved cash.

[IceDane]

No, I think the poor should have as many choices as everyone else.

My "true beliefs" are that this company isn't some kind of altruistic attempt at "helping the poor" - this is just a way for this company to capitalize on the poor in the same way any other predatory payday loan company might, except they can do it without running the risk of not getting paid.