Dave’s ExtraCash Jumps 29% as Consumers Seek Emergency Funds

Digital banking/finance platform Dave says its customers are seeking extra cash.

More accurately, they’re seeking ExtraCash, the company’s cash advance program, which saw disbursements jump by double digits since last year, Dave said when announcing its quarterly and year-end earnings Tuesday (March 5).

The company’s most recent quarter — in which it also reached profitability — showed Dave dispersing more than $1 billion per quarter in ExtraCash, up 11% from the prior quarter and 29% compared to the previous year.

“We achieved this by both growing our base of ExtraCash active members and by more effectively underwriting these members for higher advances,” CEO Jason Wilk said during an earnings call.

“Further ExtraCash product enhancements, some of which are currently in testing, give us can continue to grow monetization moving forward,” he added. “It’s also worth reinforcing that the extra cash product structure is highly scalable, allowing us to grow originations without the need for a sizable capital intensive balance sheet or take on significant credit risk exposure at any one point in time.”

Dave’s success with the program — which lets users get advances of up to $500 for expenses like rent, groceries or car payments — comes at a time when American consumers are saving less, making it more likely they’ll be unable to handle emergency expenses.

And the likelihood that the average U.S. consumer will be hit with a financial emergency is high, according to PYMNTS Intelligence research, which shows that 56% of consumers surveyed last year had recently faced unexpected expenses that cost them, on average, $5,500.

“The survey also found that when savings were limited — or not on hand at all — many consumers turned to credit to counter financial emergencies,” PYMNTS wrote last month.

“When faced with unexpected expenses costing less than $1,000, 36% of all respondents used cash savings to pay the bill. Meanwhile, 21% sought credit cards; 13% used cash advance loans; 10% opted for buy now, pay later options; and 10% relied on overdraft loans,” PYMNTS reported.

PYMNTS spoke last year with Wilk about Dave’s path to profitability, with the CEO noting that the company had been profitable before and will be profitable again.

“We’re serving the majority of Americans,” he said, adding that “they need help building their credit and help avoiding fees in their banking lives. They need help with financial recommendations, and none of this is going away soon.”