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The Companies That Take Money Straight From Your Paycheck

  • August 06, 2022

OneBlinc echoes this theme. It says that it offers “socially responsible credit” and that its credit is “for people who work hard and need help making ends meet.” This form of inclusion “is the best way to reduce social inequality” and is “a genuine alternative to the vicious cycle of predatory lending,” protecting borrowers from “abusive bank fees.”

Read between those lines, and you get a sense of who the desired customer is and is not. There are tens of millions of people who put all of their expenses onto a single debit card, for budgetary purposes, or onto one credit card to amass loyalty points. They are not the primary targets here.

But many millions more come up short each month and pay fees to their bank when their checking balance can’t cover a charge. Others can’t qualify for credit cards or have lost their banking privileges. They may turn to payday lenders for short-term help, and those lenders may trap them in a cycle of high-interest debt.

Sparing people any of this is, indeed, a noble cause. Hitching repayment to a paycheck is a potentially reliable way to do it.

But, to the companies, the pay-by-paycheck process is secondary. To them, the breakthrough is the proprietary digital tools that allow them to lend to people, based on their employment status and income, whom other companies would ignore. OneBlinc doesn’t even use credit checks, though it does report customer payments to Equifax, Experian and TransUnion.

“We don’t believe in credit scores,” Fabio Torelli, the chief executive, said in a 2019 news release, a sentiment he reiterated in an interview this week. “It’s the ultimate symbol of an outdated model that we’re determined to disrupt,” the release continued.

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