Freelance writing is not lucrative, generally. There are some publications that pay well – particularly if the piece runs in actual print – but overall a person trying to make a living on freelancing is going to have to piece together a whole bunch of $500-and-under checks. Big name writers probably don't have to worry as much, but nobody freelancing is ever truly financially secure. Imagine you're getting $2000 per piece – which, trust me, would be very rare – and you'd still have to crank out nearly two dozen pieces to hit the median household income for one year. That's a lot of pieces. That's not going to happen.
It is universally true, then, that freelancers live with financial stress. This is especially true of the vast number who, for a combination of professional and personal reasons, live in places like NY or DC. Just hitting the rent every month can be challenging. It is not hard to envision situations in which freelancers need money urgently. Let's just say that one checks the mailbox more aggressively than people who get a regular paycheck.
So it stands to reason that publications that drag their feet in paying freelancers develop very bad reputations very quickly. "Don't submit to X, it won't send your check until next year" gets around. In a lame stab at fairness, it's worth noting that this is usually (but not always) because said publication is on the brink of financial collapse. Nonetheless, people deserve to be paid for the work they do in the amount agreed upon. If the magazine is so hard-up that it can't honor commitments to its labor force then it needs to figure out a different business model or go under.
Given that freelancers are not paid much and often find themselves "a little tight" as the saying used to go, media companies are increasingly turning to services that turn getting paid into a payday loan scenario. You can have the money (which, to emphasize, is money the contributor has already earned by providing the agreed-upon service) now, but only if you give Shady PayCo a huge cut of it – 10 or 15 percent, minimum. From what I've read, not direct experience obviously, I understand that such arrangements are not uncommon in industries where people do day labor like construction.
Of course Shady PayCo argues that there is nothing predatory about this because the freelancer can wait to receive the full amount in 60 or 90 days. In fact it is a textbook example of the predatory practices of the financial industry. One publication I've submitted to used to handle its own accounts payable, and never, not once, did it take them longer than 30 days to pay me. Some publications like Dissent or The Baffler pay essentially immediately upon receipt of the invoice. But the financial appeal of having Shady PayCo handle it (which incidentally probably cost someone at the publication their job) saves a few bucks on the balance sheet.
But let's not kid ourselves, Shady PayCo isn't waiting to receive the money from X. It has the money and it's just holding it hostage for 60 days. To see if you, the contributor, are desperate enough to let them keep 15% of your payment to access it now. So we've come to the "Pay someone a decent chunk of the money you've earned for completing work in order to let you actually have the money" stage of capitalism. Here's your paycheck, but you gotta pay us before you can have it.
Since I still hold a regularly-paid job for a few more months, I can wait it out. Once that's not the case, it isn't difficult to see scenarios in which I, or anyone else, needs that money urgently enough that they're going to get that 15%.
This system clearly is working well and is indefinitely sustainable.