Argyle CEO Shmulik Fishman says the company can coach lenders on factors like consistency of work and upward trajectory. “Is your job title changing in an upward direction every six months? These are signs of a good worker and one where you might want to take another look,” he says.

Reputation markers, however, can reflect bias. Shannon Liss-Riordan, an attorney who is suing Uber for its allegedly racially biased customer star ratings system, recently surveyed the drivers she represents. Of more than 4,000 respondents, 17.4 percent of white drivers said they’d been deactivated due to a low rating, versus 24.6 percent of Asian drivers, 24.1 percent of Black drivers, and 24.9 percent of those who marked their race as “Other.” Only 16.9 percent of Latinx drivers answered affirmatively, but the real number is likely higher because several drivers self-identified as races such as Hispanic under “Other.” “It’s shocking to me that customer service data would be used for other purposes that could affect drivers’ livelihoods, including access to loans or other benefits,” says Liss-Riordan. “That’s a very dangerous precedent.”

Asked about the risk of perpetuating bias, Fishman says, “We are not in the discrimination business. And we’re also, very importantly, not in the business of creating criteria for approval or rejection choices.”

To be sure, not every payroll data firm is as focused on reputational data. “We don’t do that,” says Truv CEO Kirill Klokov. “I just don’t find that helpful when you apply for a loan to know your star rating on Uber. The primary use case is you should be able to prove that, in the absence of a FICO score [for an immigrant] like me, I’m actually a person who will pay you back the loan. Or I actually worked at a company that I’m claiming I worked at.”

While consumers must consent to share their data, if they change their minds later, they may lose access to a product and have handed over their data anyway. And some workers in a financial pinch may feel they have little choice. Michael Gray, an Iowa pest control specialist, regularly uses a cash advance app called Earnin for advances up to $550. He agreed to have his GPS location monitored by Earnin to confirm he went to work. (Earnin doesn’t use payroll data.) Although he found it invasive, he complied. “They’ve kind of got you by the balls when they’re dealing with your money and you’re trying to scrape by.”

Despite borrowers’ uneasy relationship with pay advance products, the convenience can be hard to resist. “If I need $100 for a bill or my groceries or whatever, it’s right there,” says Gray. “It’s quick. It’s a few clicks. So it’s been pretty effective at keeping me in their ecosystem.” He adds, “I really want to be out.”

What consumer and worker advocates all seem to agree on is that the proliferation of these financial products is the symptom of a deeper problem: insufficient pay. Employer-sponsored earned wage access “basically allows you to get away with paying your workers as little as possible because you can prop up bad employment practices,” says David Seligman, executive director of Towards Justice, a nonprofit law firm that represents workers.

“The thing we most need is higher wages, better tax programs, more support for low-income families, and a child tax credit,” says Levy. “But short of that, the reality is that we have many people living paycheck to paycheck. They’re going to occasionally need credit to make ends meet.”

Updated 3-23-22, 6:45pm EDT: An earlier version of this story said that buy-now-pay-later and paycheck advance products were not governed by lending laws. Regulators are examining whether or not they are subject to these laws.

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