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Min. wage in California is $9. At 40 hours/week, that's $360. $3/week is less than 1% of that. Payday loans use much higher interest from what I understand.

(I ignored taxes/withholdings to make the math easier).

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"$3/week is less than 1% of that"

That's 1% for one week !! In comparison, current CD yields are close to 0% per annum

I don't feel that most of the people this service is targeting even knows what a CD is, but I'm pretty sure a lot of them are familiar with payday loans. Unless I'm missing something this service definitely seems a lot less evil than a payday loan.

That's less than 1% over one week. The APR would closer to 15-20% (depending on salary, pay frequency, etc.).

Yes, but ed's statement still stands. Payday loan APRs often reach into the hundreds of percentage points.

https://www.scc.virginia.gov/bfi/files/pay_guide.pdf

http://www.in.gov/dfi/2366.htm

I've answered with an EDIT in my GP comment to keep it in one place.

I'm inclined to believe you, but how would you something something close to 15-20%?

For 1 week: 3 / 360 = 0.8%

For 52 weeks: (3 * 52) / (360 / 52) = 0.8%

Or is it that Even is holding on to effectively a weeks worth of pay at all times, and we're calculating interest based on $360 of principal? Or is compounding coming into play somewhere?

See EDIT: on the GP comment.

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