While there’s no news on whether this will see them raising or lowering the exorbitant rates on their short term loans, one payday advance lender has announced it could be moving into the savings market.
Errol Damelin, chief executive for instant cash loans provider Wonga, says that the controversial company is currently deciding whether or not it will broaden the types of financial products it offers to consumers. One of the moves that would be most likely to occur first would be offering savings accounts that could be managed online, said Mr Damelin, who believes that Wonga has come to replace the ‘bankrupt’ high street lending industry and that his firm is leading the charge to revolutionise finance.
Wonga is constantly thinking about the problems that have arisen as a result of the current economic landscape in order to match its offering to the needs of the British consumer, Damelin added. Of course, many of these same consumers would argue otherwise, especially anyone who has had to pay exorbitant fees and interest rates after having to roll over one of Wonga’s payday loans for an additional month; while the finance is indeed much more easily accessible than high street credit, the cost is quite often much too high and ultimately unsustainable for lower-income earners.
Still, transitioning into providing more financial services may be a good thing in the long run for consumers, as Wonga would have to submit to regulation from the Financial Services Authority in such a situation. The FSA does not currently regulate the payday lending industry, as that is the purview of the Office of Fair Trading; with more stringent regulations placed upon it, Wonga may have less leeway to treat their customers like rubbish as a result.