Payday Lending: Will Anything Better Replace It?

Wells Fargo used to have a service like this [1]. You could get up to half your regular direct deposit amount or $500, whichever is less. You were charged $2 for every $20 of the loan amount, and it was automatically deducted from your next direct deposit. At that rate, assuming 1 direct deposit per month, that would be 120% annual interest. The ATM would suggest this alternative if you were about to withdraw more money than you had available, resulting in overdraft charges. I would think more options like this (but with more reasonable fees and flexible repayment terms) would be a preferable alternative to payday loans.

1. https://www.wellsfargo.com/about/press/2014/20140417_direct-...

LendUp etc try and tackle this space. But I would think the issue for tech startup, is that the people and families in most need of it, will not have the data history for a big data solution?