Cheq: The fintech out to eradicate payday lending

author-avatar By on March 02, 2020
Cheq: The fintech out to eradicate payday lending

Photo: Cheq founders Tarek Ayoub & Dean Mao. Source: Cheq 

Cheq is a first of its kind 'Pay On Demand' solution that allows working Aussies to access their future wages instantly.

The fintech allows customers access to up to $200 and charges a fixed transaction fee of 5% with no additional fees or interest, which is repaid via direct debit on your next upcoming payday. 

That fee is well below the annual 52% to 1,000% that Cheq said Aussies are being charged by many payday lenders on similar amounts. 

CEO and co-founder Tarek Ayoub said Cheq wants to eradicate payday lending and help the almost 6 million Australians currently living paycheck to paycheck. 

"As our society increasingly embraces the 'on-demand' model of consumption, it is only natural that we begin to see this flow over into remuneration," Mr Ayoub said. 

"Having access to this type of service could prevent thousands of vulnerable Australians from turning to predatory payday lenders, with their sky high interest rates and fees, and their vicious repayment structures designed to keep you trapped in a crippling cycle of debt."

Currently the app is only available on the Google Play store, but Mr Ayoub said they expect to release an iOS version in the coming fortnight. 

Much like Afterpay did with 'buy-now, pay-later', Cheq is aiming to revolutionise the credit landscape by being the first player in Australia to offer 'Pay On Demand' direct to consumers. 

"You can get food, TV shows, cleaning services, dog walking, and everything in between on demand. 

"So why is that we can't yet access our own money - money we have already physically worked for - as soon as it's needed?" 

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A focus on budgeting and good spending habits 

Cheq uses machine learning, AI, location data and statistical analysis to offer personal financial management solutions and also determining when and how long individuals have been at work, ensuring wages have been accrued. 

Money is only recouped from a user's bank account once wages are received, so they can't exceed their spending capacity or get trapped in debt. 

Mr Ayoub told Savings.com.au that this technology allows Cheq to easily mould itself to each unique user and understand how they financially operate. 

"We base a lot of our assessment on whether to give you that pay on demand or not by how your're spending and your budgeting with us.

"So when somebody signs up, we provide them with tools to predict their upcoming bills so they can stay in control.

"We categorize their expenses as well for them to make sure that they understand how to actually spend it." 

Additionally, Cheq's technology is able to create an automatic budget for the customer, so they can budget according to their pay cycle. 

"Now part of that budgeting process, is also a saving component where they can actually create savings goals for themselves," Mr Ayoub said.

"In the future, one of the products that we've got that we're coming out with is actually a savings scheme where they could actually save money with us and we'll be able to actually invest it for them and give them a higher return." 

Currently, after taking out a loan with Cheq, you're required to pay it back on your next payday. 

But Mr Ayoub said there are plans to roll out an instalment plan, where the customer would be able to pay back the amount in four separate payments. 

Six hundred users downloaded Cheq from the app store within two days of it's beta launch, with most funds used for transport and groceries. 

Payday loans are a debt trap for millions of Aussies

A report released in November of last year confirmed much of what Cheq claimed regarding payday loans. 

The research from the 'Stop the Debt Trap Alliance' found just over 4.7 million individual payday loans were written between April 2016 and July 2019, worth an approximate $3.09 billion. 

These loans were taken out by almost 1.8 million households and generated around $550 million in net profit for lenders. 

The report found one loan can quickly turn into multiple, with equivalent annual interest between 112.1% and 407.6%. 


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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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