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Target Market Determination

Effective date: 5 October 2021

Last updated: 11 April 2023

Prepared by Wagepay Pty Ltd, ABN 15 645 114 629, and its subsidiaries (“we”/”us”/”our”). This Target Market Determination (TMD) is for our Wage Advance product.

What is a Target Market Determination?

This TMD describes:

  1. the attributes of the product;
  2. the class of customers that the product has been designed for;
  3. how the product attributes meet the target market needs;
  4. the product distribution conditions;
  5. review periods for the determination;
  6. review triggers for the determination.

Product Key Attributes

The key attributes of the product are:

  • credit amounts ranging from $100 to $2000.
  • credit term of 1 to 32 days.
  • a standard fixed credit charge of 5%.
  • a standard annual interest rate of 24%
  • mobile app and web browser portal.
  • transparent, legible and easily understood contract, including financial table and terms.

Target Market

The class of consumers that is the target market for the product are consumers who:

  • are interested in a short-term loan pending payment of their regular wage;
  • need amounts of between $100 and $2000;
  • need to pay for purchases and expenses, which may be regular and on-going, and which, for whatever reason, they cannot pay for these expenses in a given pay cycle from their disposable income;
  • are assessed as being able to afford the repayment on the product;
  • want the funds quickly;
  • want the account setup process to be simple, online, and quick;
  • want product terms that are clear and easy to understand;
  • want ready access to self-service options and perform customer service requests online;
  • are not interested in more expensive forms of short-term credit, such as Small Amount Credit Contracts;
  • are not interested in medium or long product term lengths;

Critical Assessment

In making this TMD, a critical assessment must be made to determine how the product meets the needs of the target market.

Assessment Criteria Assessment Outcome
Purpose The purpose of the product is to pay for regular, ongoing expenses which, for whatever reason, cannot be paid for in a given customer’s pay cycle with their wage.
Key Attributes related to the needs, objectives and financial situation of the Target Market The product’s key attributes benefit the customer in the target market because:

  1. the Wage Advance amounts are selected by the target market consumers.
  2. the Wage Advance terms are suitable for the consumers’ needs, requirements and objectives, and financial situation.
  3. the Wage Advance repayments are assessed as being affordable for the consumer.
  4. the Wage Advance costs are lower than other forms of short-term credit, such as Small Amount Credit Contracts, making them fit for purpose and appropriate for regular use.
  5. the account setup process is done in the app or online and most are completed within 3 minutes.
  6. once an account has been created, advances can be requested, with automated assessment times under 2 minutes.
  7. there are no assessments done by a person, or requests for additional information.
  8. the funds are available within 60 seconds after acceptance of the contract by the customer for over 90% of customers.
  9. the contracts are legible, easy to understand and short, being only 5 pages long in 10 pt. font.
  10. the customer has a mobile app and web browser portal available 24 hours a day, 365 days of the year.
Key Indicators of Product Suitability Historical data over the last 3 months show that this product has been the subject of:

  1. very low default rates;
  2. few customer complaints.

This indicates that the product is suitable for the target market and is meeting the consumers’ needs, requirements and objectives, and financial situation.
Will the product deliver what is promised in the future? The maximum product term is only 32 days long. The product does deliver what is promised over its term.
Does the product need a redesign? As at the last review, the product did not require redesign.
Does the target market need to be narrowed? As at the last review, the product target market did not need to be narrowed.

 

Distribution Conditions

The following conditions apply to how the product is distributed.

Voluntary Distribution Conditions The product will be distributed in compliance with the following voluntary distribution conditions:

  1. no Wage Advances to any customer whose only source of income is Centrelink Benefits.
  2. no Wage Advances to any customer who earns under $500 per week.
  3. no Wage Advances to any customer who is under the age of 18.

 
Distribution Channels Distribution channels will all present the product appropriately to consumers in that they:

  1. do not contain any misleading or deceptive conduct.
  2. contain all disclosures required by law.
  3. are, if distributed through any third party, regularly vetted to ensure the above.

Scheduled Reviews

We will conduct periodic reviews of this TMD. The product manager will conduct all Design and Distribution Obligation (DDO) reviews and report the results of the review to the board of Wagepay. The report must be provided to the board within two weeks of conducting a review and specify:

  1. Trigger events have occurred, if any.
  2. Why that event has occurred, if known and if it is attributable to an external source or to the design and distribution of our product.
  3. What, if any, action to take in order to ensure compliance with DDO, such as:
    • No change if all is within the parameters published above; or
    • The product needs a redesign;
    • A new distribution condition is required; or
    • The product must cease to be offered

Other Review Triggers

We will conduct further reviews if a trigger event occurs. The product manager will monitor for the trigger events on a monthly basis. We will review this TMD if the following trigger events occur in relation to this product:

  1. One or more terms of the product are altered and we consider that this alteration reasonably suggests that this TMD is no longer appropriate.
  2. Feedback, regulatory orders or directions are received from a regulator which suggest this TMD is no longer appropriate.
  3. The number of defaults as a percentage of advances increases by 10% in a 3-month period.
  4. The number of complaints from approved customers as a percentage of customers increases by 10% in a 3-month period.

Significant Dealings

If at any time, we detect that more than 5% of the consumers receiving our product within a three (3) month period are not within our Target Market, we shall report this to ASIC as a Significant Dealing within ten (10) business days.