If you’ve ever considered applying for a payday loan in Canada, you’ve probably looked at two of the biggest payday loan providers – MoneyMart and Wonga. Since the global economy has been facing challenges over the past few years, payday loan firms have been popping up worldwide. If you’re a Canadian facing this situation, it’s well worth it to look at the various options you have available to you before you make a decision on who to take out a payday loan with or if you are going to apply at all.
Let’s take a closer look at these two firms so you understand how they position themselves in the marketplace and what they may or may not be able to offer you:
A grassroots Canadian firm, MoneyMart started out as an entrepreneurial venture in 1982 in Edmonton, Alberta. At the time, the company’s founders had recognized a growing trend towards convenience and service in the financial services industry. In order to position itself differently than traditional banks, MoneyMart opened outside of regular business hours and situated in easily accessible locations.
By 1994, there were over 100 franchised and corporate branches. By 2000, these exceeded the 200 mark and in 2013, MoneyMart has expanded to over 500 branches across Canada.
MoneyMart was purchased by Dollar Financial Group, Inc. in 1996. Dollar Financial Group owns and operates the largest international network of retail financial services stores, with over 1,335 locations in Canada, the United States and the United Kingdom.
MoneyMart states that its customers are everyday people with an annual income at the national average. The primary reasons why they go to MoneyMart compared to their traditional bank, is that they know they will receive a fast service, appreciate the company’s convenient locations as well as the extended operating hours.
Their services include cheque cashing (including US and small business cheques), payday loans, Western Union Money Transfer® service, tax services, currency exchange and bill payments. There are also founding members of the Canadian Payday Loan Association, stating that they aim to protect customers from excessive debt.
They offer an online payday loan service, where you can approved instantly if you are a resident of Alberta, British Columbia, Nova Scotia, Ontario and Saskatchewan. In order to qualify you need to provide evidence of a steady job or source of income and have a chequing account. They also offer you a facility to apply in advance payday loan facility, helping you to begin the application process online. Then when you get into the MoneyMart store, you won’t need to spend time filling out the application and you can receive your money faster.
A payday loan lending firm that was started in the UK, Wonga started to offer payday loan services to Canadians in 2011. It states that it’s grown into one of the world’s most innovative credit businesses, providing millions of loans to consumers. Their focus as a company is to solve people’s short term and urgent cash flow problems with an equally short term and responsible solution.
Wonga prides itself on the ease of use of its website for the quoting and application processes. In order to apply, you use sliders on its home page to decide exactly how much cash you want (up to $600 for first time borrowers) and how many days you need it for (up to 45 days). They then display the total cost of what you will owe up front after the timeframe you’ve noted.
If approved, you will have the option to receive funds either within an hour using the Canadian E-mail Money Transfer, or next business day using fully automated Bank Transfer. Over time, if you maintain a good record, Wonga will gradually increase your Wonga trust rating, allowing you to borrow up to $1500.
Wonga has been highly criticized in other markets – such as the UK – for its marketing techniques. It’s clever and attractive advertising has used humour to attract interest from new customers. This has created a scenario where many individuals visit the site but fail to take the time in understanding their full commitment when it comes to repayment. This, then, can lead to the accumulation of debt for the customer.
The Primary Differences – MoneyMart versus Wonga
From reading about the background about both companies, there are a few key differences between their approaches to offering payday loans. Let’s take a look at a few of these:
- Reputation in Canada – MoneyMart is a well-established Canadian firm with years of history here. The positive about this is that they must have loyal Canadian customers for a reason. Additionally, they must not have faced substantial criticism or legal issues if they are still operating across the country. Wonga is fairly new to Canada so they haven’t been able to create that reputation as much.
- Online vs physical locations – MoneyMart offers both an online facility for applying but also provides a physical store. Wong is online only. Both have their pros and cons. If you are looking for instantaneous cash, Wonga is designed to deliver a speedy process. MoneyMart’s online process will be able to do this but it may require a further layer of review in store.
- Bad press – although it hasn’t had much press in Canada, the press exposure for Wonga in the UK is pretty bad. They have faced a lot of criticism since they opened up shop in 2007. This is largely due to the fact that they were taking advantage of a market situation and often to the detriment of the consumer. Wonga does have a place in the market but it’s unclear if its business strategy will withstand the negative press it’s received in the past few years.
- Payment terms – with Wonga, you set the payment terms up to a term of 45 days. However with MoneyMart, you are required to pay back your loan by your next paycheque. If your next paycheque is in two weeks, that is when the funds will be repaid to MoneyMart, coming straight out of your account.
If you’re thinking about applying for a payday loan with Wonga, MoneyMart or any of the other Canadian providers, make sure that you take your time to understand all the details. Each provider offers something different and often has a different pricing structure. Remember this is money you are obligated to pay back so it’s serious business. Take the time to understand all the fine print regardless of who you decide to take a payday loan from.