Many people who live paycheque to paycheque might benefit from this new generation of apps, as these pay-on-demand services could be a lifesaver when unexpected expenses appear before payday.
Though pay advance apps are quite new in Australia, they are a rapidly growing product in the financial services sector.
If this tidbit of information piqued your interest, read on as you will find out what wage advance apps are and how they work in Australia. You’ll also learn how you can apply for pay on demand, and what these apps have to offer.
What is a pay advance app?
Pay advance apps basically advance users up to a certain percentage of their salary before their employer pays them. If the need arises, you can apply and access your money in minutes.
So they offer a type of short-term credit by giving you access to your paycheque whenever you want, without having to wait for payday.
However, don’t confuse it with a cash advance. They are both a type of financing, but the difference is that a cash advance is a principal and interest loan paid back in instalments, while a pay advance is repaid in full on your next payday.
How do pay advance apps work?
Most pay advance or pay-on-demand services require you to download an app. You have to sign up for a wage advance app of your choosing, which will directly connect with your bank or employer.
The only condition is for you to be employed and have an income. Based on your regular earnings, the app will calculate how much money you can borrow. You can then apply for a wage advance and receive the cash in minutes.
One such app is PressPay. The steps for using PressPay include:
- Registration – only takes two minutes tops, as it uses your phone number and text messages, so you don’t even need to download an app.
- Approval– based on your current earnings, PressPay calculates your available balance for withdrawal.
- Withdrawal – just send a text message to request an advance transfer into your bank account.
- Pay Back – the amount advanced, plus a 5% fee, will automatically be deducted on your next payday.
It’s that simple —no further commitment on your part. There are no monthly instalments, no hidden fees, no overdrawing your bank account, no long-term loan, and no headaches.
Pay advance apps are likely to change people’s approach to borrowing money, as they are more cost-effective and flexible than other forms of finance.
Features of pay advance apps
Features and fees of wage advance apps differ from one provider to another, but they have some things in common.
- Often cheaper than other types of short-term loans (if repayments are made on time). Pay advance apps usually have a flat fee of 5% per transaction.
- Same-day money access. Most providers complete the money transfer within minutes.
- Automatic deductions. The money you’ve borrowed is automatically deducted from your bank account once you get your next paycheque.
- No credit checks. The majority of the providers do not conduct credit checks, so you can apply even if you don’t have a good credit history.
Types of pay advance services
In Australia, there are three types of pay advance services: third-party apps, wage advance services offered by employers, and pay advance services offered by banks.
- Third-party apps
This category includes pay advance apps that link directly to your bank account. They usually charge users a flat fee of 5% or more if they access their wages early.
The apps offer access to either a fixed amount (ranges between $100 and $1250, depending on the app you choose) or a percentage of your earnings (up to 25%).
- Pay-on-demand services offered by employers
Employer-offered pay-on-demand services are handled by the payroll department of each organisation, and advances are automatically deducted from your salary.
- Pay-on-demand services offered by banks
Pay advance services offered by banks also operate via an app. The conditions differ from bank to bank, but usually, if the sum you use before payday is not fully repaid on time, your account will be considered overdrawn. This means interest fees may apply.
How to apply for pay on demand
The pay-on-demand services available in Australia are easy to use. You just have to choose an app, like PressPay, and sign up. After registration, you’ll provide a valid ID and some information about your online bank account. This step is necessary so that providers have access to details on your income.
Once you activate your account and it’s verified, you can apply for a wage advance whenever you fall short on money. The money will be transferred into your nominated account in no time.
On the day your salary hits your bank account, you must repay the amount you borrowed and a fee. In some instances, the repayment is made automatically. The app will deduct the amount you borrowed from your bank account.
Pay Advance apps FAQs
What app lets you get your paycheque early?
Pay advance apps let you get your paycheque early. With apps like PressPay, you can draw a portion of your earned wages before payday. Instead of paying interest and monthly instalments, with PressPay, you only pay a flat fee of 5% per transaction.
Why was my cash advance declined?
Your cash advance request may be declined for various reasons. Here are some of them:
- You asked for more cash than you are allowed to withdraw in advance. Most apps offer up to 25% of your wage. Others give you a set amount, between $100-$500. Make sure to learn about each app’s conditions before applying for a pay advance.
- You are not employed or don’t receive a regular income. Only people who are employed can benefit from pay-on-demand services. Self-employed individuals are not accepted. Your income must be over a certain amount. With PressPay, you should earn more than $450 per week.
- You asked to be paid in a Savings account. With most apps, the amount advanced is deposited into a transaction or chequing bank account. Savings accounts are not accepted because of restrictions placed on them by banks.
Can you go over your cash advance limit?
No. Unlike credit card cash advances, pay advance apps have a set limit for how much money you can withdraw before you get paid. With credit card advances, you can exceed your cash advance limit and pay higher interest rates or over the limit charges as a result.
Can you borrow money online instantly?
Yes. Pay advance apps like PressPay provide turnaround times of just a few minutes. Apply in under 2 minutes, check if you’re eligible and get instant approval.
Pay advance apps are a good solution if you need money quickly between pay periods. Anyone can face unexpected expenses. You may find yourself in a situation where you have to pay an overdue bill, pay a doctor’s visit, or simply do not have money for groceries.
In any of these cases, you can sign up to PressPay and request some of your earnings early.
Considering the popularity of pay advance apps in Australia, make sure to compare the features when choosing such an app. Check your eligibility, how much you can apply for, and what fees and costs are involved.