We're talking about a lucrative industry that exists around extracting money from the poorest people. And most of it has to do with them waiting to be paid for work they've already done.
Is it really though?
If someone is really in this poor of a financial situation, I'd bet that it could actually be worse to receive money day by day. This gives them access to use it prior to when larger bills are typically due: the start or end of the month.
That is, if you get paid on the 31st, you'll have that full paycheck available to pay your loan, mortgage/rent, car, phone service, and so on on that day or within the next few days. Then you have the rest leftover to blow.
Day by day payments involve control and making sure you are setting aside enough.
Have you ever noticed how excited people in this situation are for "payday", since they're able to go buy stuff? Now, every day is payday with the associated temptations.
If you get $300 on the 1st or you get $10 a day you'll have the same amount on the 30th. If that amount is less than your monthly expenses you're in trouble and payday loans start to look attractive.
A lot of people in the seedier parts of time are working jobs that don't pay a livable wage, and a lot of people are also spending more than what they should be. Sometimes irresponsibly, sometimes out of necessity (see: the boot theory of economics).
Paying irresponsible people more often will exacerbate their problems.
Paying poor people more often won't make them not poor any more.
However, for many of America's working class they are < 1 paycheck from bankruptcy. I speculate that for many of them getting the "liquidity" of getting paid daily would stop some of them from missing payments.
But then I came to the realization that real life doesn't work that way, even looking at my (lack of) savings through the years. That is because life is full of stress, and throwing money at the causes of stress is sometimes the only way to reduce that stress. For example, having a teenager that has a drug issue, if you don't have the extra money then you deal with it, but if you do have extra you can spend it on therapy which may help thereby reducing stress.
And the various stress items really don't go away until you are bringing in about 70K or so a year -- at that point you can finally afford to pay off various debts, build an emergency fund, drive a reliable car, and live in a slightly better neighborhood.
If you get a $1500 paycheck every 15 days, as opposed to a $3000 paycheck every 30 days, then you earn 15 days of interest on $1500 that you would not otherwise earn. At Ally bank, that could be 1.85% in savings accounts. This two-paycheck cycle would repeat 12 times a year, so for half the year you earn interest you would not otherwise earn, totaling to roughly (compounding negligible) 1500*.0185/2= $14.
If you assumed you could get 9% in the stock market, the time value would be $68.
.. per year. Or $1.16/mo or under .04%. Although that's not literally nothing, it's awfully close. Oh, and that's before income tax.
> If you assumed you could get 9% in the stock market, the time value would be $68.
Although that assumption may be a bit of a stretch, something a typical consumer might be far more likely to encounter (and need not apply income tax adjustments to) is consumer loan payments.
A 20% revolving balance paid 15 days early results in $12.50 monthly, which can pay for a streaming subscription.