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Post-Pandemic Payday Lending

A Report on Transaction Trends

By John R. Greenwald, General Manager, Catalis Regulatory & Compliance


In the early stages of the COVID-19 pandemic, Veritec Solutions (now Catalis) received several inquiries about how the ongoing public health crisis had impacted transaction activity for payday loans (also called short-term loans, small-dollar loans, deferred presentment loans, or deferred deposit loans). In response, we released a series of four reports that provided an overview of actual payday loan activity across multiple states since the onset of the pandemic. Those reports were released in July 2020, October 2020, June 2021, and April 2022 (

Transaction Activity Since the Onset of the COVID-19 Pandemic

Payday lending transaction volume trended downward in the two years prior to the COVID-19 pandemic by an average of approximately 5% annually. The first significant signs of the COVID-19 pandemic’s impact on payday loan transaction activity appeared in March 2020 as illustrated in the figure below:


The graph illustrates the change in weekly payday loan transaction activity between January 29, 2020, and May 30, 2023, when compared to the corresponding weeks in 2019. Note that the 2019 calendar year is used as the benchmark in this report for comparison of weekly transaction activity during the reporting period. It further illustrates the variation in % change for each weekly period among all participating state jurisdictions. For example, the smallest and largest individual % change among all participating state jurisdictions for the week ending July 15, 2020, was -41% and -61%, respectively.

Transaction activity has shown significant declines due to a variety of government stimulus payments and other related factors, resulting in a drop in transaction volume of over 60%. Since the last report we released on April 18, 2022, transaction volume has recovered slightly, hovering around 50% of 2019’s volume. Most of the Covid-era stimulus programs have now expired, including temporary benefit increases in the Supplemental Nutrition Assistance Program (SNAP) which ended in March 2023.

Beyond the impact of stimulus measures, it appears that the payday lending space may be facing a permanent shock due to the pandemic and marketplace shifts. While definitive conclusions cannot be drawn without detailed analysis, we suspect that the industry’s shift to under-regulated alternative products along with the rapid growth of unregulated products like Buy Now, Pay Later (BNPL) and Earned Wage Access (EWA), have played a role in declining traditional payday lending volume.

How can Catalis help?

Catalis has over 20 years of experience architecting, developing, deploying, and supporting real-time solutions that regulators need to protect consumers and promote healthy markets. We are experts at navigating complex regulatory landscapes like cannabis and work hand-in-hand with regulators to develop user-centric solutions that streamline workflows and remove pain points. Contact us to schedule a consultation.

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