According to Newcastle University researchers, payday loan companies build their websites and applications specifically to keep individuals from leaving the application process.
You’ll have money in 15 minutes.
According to Algernon Ronson, financial expert at OakParkFinancial, Customers are encouraged to borrow by employing interactive gadgets such as sliders, brightly colored ‘apply now’ links, easy forms, and photos of happy individuals. It means that a consumer may get their loan authorized and cash in hand in as little as ten to fifteen minutesall without ever speaking to another person.
Dr. James Ash of Newcastle University’s Department of Media, Culture, and Heritage stated: “The websites and apps are designed to be very easy to use, but it is difficult for individuals to stop and think about what they are doing when applying. The borrower feels they are in control, yet they are being guided skilfully through the whole process. As a consequence, this market has grown rapidly in recent years.”
According to the researchers, the High-Cost Short Term Credit (HCSTC) sector comprises cash and payday loans, guarantor loans, and logbook loan providers, where extremely small quantities of money are provided for very short periods of time.
It is believed to be worth 2 billion a year, and 82% of all payday and cash loans in the UK are currently sought and processed online using digital interfaces and websites.
A straightforward approach
After meeting with eleven web designers and forty customers, the group identified how the firms handle ‘frictions,’ which they describe as blocks or obstacles that delay, impede, or halt a user asking for a loan.
Sliders are a ubiquitous feature of most websites and applications, and they are often the first page a user sees throughout the application process. It normally consists of two bars, the first referring to the amount borrowed and the second to the loan’s period instantly at Oak Park.
According to the creators, the sliders are meant to be ‘playful,’ and the more people who play with them, the more likely they are to apply for a loan.
The gadget also minimizes the number of touches needed to finish the surgery, resulting in a single smooth motion with less ‘friction.’ According to the research, this increases client interest in the application process, making it more difficult to quit.
The next step is to click the ‘Apply Now button. By altering the color of the button, the application rate may be boosted. When the button on one website was changed from red to orange, the number of applications rose by 8%. Application forms are also designed to seem brief and manageable, avoiding consumers from being scared off by official-looking documentation.
“What’s especially troubling about the market’s proliferation is that the individuals who use them are typically among society’s most vulnerable,” Dr. Ash says. “Some of the people we spoke with did not consider payday loans to be debt at all. It was simply another source of income and another cost to pay for them. This form of loan is unsustainable and may worsen mental health issues.”