Andrew Kushner, a senior policy counsel with the Center for Responsible Lending, sees these services as “the next frontier in payday lending,” he told Gazetteer SF. Many of these companies advertise free services, “but then when you get down the transaction pathway, it becomes clear that you have to pay a fee of up to $10 to get instant access to funds,” Kushner said. Most users pay that expedited fee. Some of the apps also ask customers to leave a “tip,” which 73% of users agreed to do in 2021, according to state regulators. While these services don’t technically charge interest, the fees and tips people pay end up being similar to the average interest charged by licensed payday lenders in California, according to the Center for Responsible Lending.
