Cash Advance Usage increased 39% in the past 6 months

A Quick Overview:

  • Users who received cash advances in March 2022 had a 38.92% increase in cash advance deposits in August 2022
  • Repayment rates over this period were over 93%
  • So far, it’s been hard to see a comprehensive and real-time picture of all debt and cash advance payments (especially for EWA and cash advance products) –’s Cashflow API is changing that.

The premise is simple: 

Why should someone have to wait weeks to access the money they’ve already earned? 

 In this post, we’ll look at:

  • Key drivers fueling the growth of these services 
  • Defining Cash Advance and Earned Wage Access
  • Trends we’re seeing in our analysis across millions of consumers 

Key Drivers behind the Growth of Cash Advance and Earned Wage Access

Rising Cost of Essential Goods

First, the rising costs of essentials like gas and groceries mean that millions of people have less money between paychecks. They struggle to pay their bills and emergency expenses. Increasingly, they’re turning to cash advance apps to help them access some of their next paycheck a few days or weeks early – especially when they don’t have access to credit. 

High Cost of Overdraft Fees

Second, overdraft fees cost people an average of $30 per overdraft. Even just a few dollars can cause an account to go negative. In 2020, banks earned $11.8 billion in revenue for overdraft fees alone. Households who are already financially vulnerable pay most of these fees, forcing consumers to find lower-cost solutions like cash advances.

Lower Barriers for Creating Solutions

Third, financial infrastructure including BaaS platforms like Unit and Bond, Payroll APIs like Atomic and Pinwheel, and bank aggregators like Plaid and MX are making it possible for fintech companies to rapidly build and launch cash advance programs. Startups offering EWA products raised over $1.13 billion in 2021.

Let’s Cover the Basics:

What is Earned Wage Access?

Earned Wage Access (EWA) or On-Demand Pay allows an employee to receive a portion of their earned wages ahead of their regular pay cycle. When payday comes, the amount of early wages they received is debited from their paycheck. Companies like Zayzoon, Payactiv, and DailyPay are just some examples of the number of fintechs that are offering this benefit.

What is Cash Advance?

A cash advance allows a person to access some of their paycheck before their actual payday – the consumer repays the advance from their account, oftentimes once their paycheck deposits.

Popular apps like FloatMe and Grid offer consumers an opportunity to get up to $250. Cash advance companies use evaluation criteria such as direct deposit history and spending habits to gauge whether users will repay and how much to advance them.

In sum, these companies give consumers the extra buffer they need to get to the next paycheck – without getting trapped in a cycle of over-borrowing.

A look into the data 

We analyzed a segment of our dataset representing 5 million transactions and 51,000 users who took out cash advances or EWA. This segment comes from a total anonymized set of 111 million bank transactions.  

Here are some interesting findings:

Increase in Cash Advance and EWA app usage

Below are the average cash advance and EWA amounts and frequencies for these 51,000 users.

We honed in on a cohort of 18,000 users who received a cash advance or EWA in March 2022. This helped us understand how consumers are using these services over time.

The dollar amount deposited per user increased by 38.92% for Cash Advance and 17.11% for EWA from March to August 2022.

Several drivers behind this increasing usage:

  • Bills such as utilities, loans, and rent increased by 4.5% MoM, likely causing people to take out more advances
  • Users are signing up for additional cash advance services to make ends meet
  • Users are taking on more frequent advances compared to previous months
  • Positive repayment history allows users to take higher dollar amounts

Evidence of Repayment

We’ve seen that usage is increasing. But are people repaying the advances once they’ve covered their expenses?

Yes – and the repayment rate is extremely high. Within 45 days, 93.05% of advances are repaid. The ability to track repayment history is an important factor in measuring a person’s financial health and responsibility. In this case, it demonstrates that people can use advances responsibly. In contrast, only 44% of credit card users pay off their balance, according to a GoBankingRates study

Real World Stories

Before we get into more data, it’s important to acknowledge real-world stories shared by people who are using these solutions.  

The reviews below exemplify how much a cash advance of $20 can help a family.

These solutions are making an impact. People can get their earned wages when they need them, not just when their paycheck is scheduled to land. 

Insights on Spending Habits

Pave’s ability to track key transaction information like when and where they happened helps explain some of the reasons why people are using cash advances.

Our data shows that the most common expenditures made following cash advances and EWA deposits are as follows:

Bottom Line

Americans want access to their earned wages faster, and financial services are catching on. These products can help to improve consumers’ financial health. They give them access to funds that help maintain timely bill and debt payments as well as cover unexpected expenses – without incurring unnecessary fees, or even worse – taking out a predatory payday loan or title loan.

To put it into perspective, 61% of Americans (around 157 million adults) reported that they live paycheck to paycheck, according to a June 2022 Lending Club Report. Having access to extra cash and earned wages can be the difference between getting by or not having enough to buy groceries.

People are increasingly struggling to get by between paychecks. Right now, these advanced access solutions may just be the answer.

What’s ahead 

The demand and the need for getting paid faster are clear in both the data and employee surveys – and the market is responding. 

Cash Advance is expanding

Vertical SaaS solutions are emerging in almost every industry enabling Earned Wage Access solutions.

A few examples include SMB payroll and scheduling software like Homebase, creator platforms like Patreon and Lumanu, restaurant software like Toast, and banking for Gig workers like Moves. They’re addressing America’s demand for payday flexibility, and benefitting from loyal customers and employees.

How Pave helps companies manage Cash Advance risk

The approval process for advances takes significant time and effort to implement and build a robust process around. In addition, as more companies offer cash advances and EWA, they increasingly take on the risk of users defaulting on their repayments. 

Pave offers a few products to help companies build out their approval process, minimize cash advance defaults, and maximize repayments: 

  1. 100+ affordability attributes to analyze a user’s balance history, loan payments (including other BNPL), cash advance history, recurring expenses, spending patterns, fees, income history, and more. 
  2. Cash Advance Score that predicts the likelihood a user will repay a cash advance within a given period of time. Our score is trained on a growing dataset of millions of cash advance deposits and repayments, allowing newer fintechs to take advantage of a large training dataset that they’ve not yet accumulated. 
  3. Predicted next payroll date allows companies to forecast when to pull a cash advance repayment, reducing the risk of pulling the repayment too early and causing the user to go into overdraft.

Using Pave’s products, newer companies can bypass much of the effort it takes to build out a cash advance model, and companies later on in their production can boost their modeling efforts with new attributes.


While early access to wages is a promising tool to help alleviate temporary cashflow challenges, it’s by no means an end-all solution to people becoming financially healthier. 

It is, however, a gateway solution to help people develop financial management skills like credit building, debt payoff, and spending management. People need immediate help, and cash advance is a bandaid – it creates a wedge to empower people with the experience to responsibly manage longer-term financial challenges.

See how our Cashflow API powers insights for Cash Advance services.

Interested in learning more? Let us know.