Pay on demand apps are a new type of financial service that lets you access your wage before you’re due to get it from your employer. These apps are designed to help you budget by getting your own money to you when you need it. Find out exactly how they work, what apps are available and what to know before you sign up.
Pay on demand apps let you access a portion of your pay before you’re due to receive it from your employer. To get access to your pay you are charged a fee, usually around 5% of the amount you’re accessing. The amount is then repaid out of your next pay or across a few pay cycles.
Pay on demand apps generally fall into three categories:
You have a bunch of options to consider:
No Interest or Hidden Fees
With Beforepay you can access up to $1,000 of your pay for a 5% fee. To decide your limit, Beforepay will securely connect with your bank to see your salary details.
The costs will differ between apps, but you will generally be charged a percentage of what you borrow. This is usually around 5%. These apps may also charge a late fee if you don’t meet your repayments. For example, CommBank AdancePay charges 14.90% for late payments.
Pay on demand apps in Australia have a number of security and privacy safeguards in place to keep everything secure, which includes encryption of your data.
These apps operate in a similar space to buy now pay later apps like Afterpay, meaning they don’t need to hold the same licences as banks. However, they are required to have security measures in place to keep your data safe. All pay on demand apps use secure methods to link up to your bank account.
Beforepay and MyPayNow will not affect your credit score. CommBank reserves the right to report AdvanceNow repayments to credit bureaus, which may affect your credit score.
No, your employer will not be contacted. If your employer offers a pay on demand service, they are usually not told who is uses it.
Eligibility criteria differ between apps. Generally, you will be eligible if you:
Most of us know the feeling of waiting to be paid. It can make handling big, unexpected expenses tricky and often lead people to expensive forms of credit, like payday loans. Pay on demand apps are a great alternative to consider if you really do need your pay early.
Just consider whether the fee is affordable and if the repayments will cause any issues for you. Much like other alternative forms of credit, you also should not consider this as an ongoing form of credit.
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