Reason for the higher rates is that the rate of default is much higher than more traditional loans. So these "payday loans" outfits are taking a much higher risk than traditional banks that are more discriminating about who they loan money to. Because the more traditional banks are more discriminating, they have less defaults and so can charge lower rates.
The real life lesson in all of this is that there are consequences for defaulting on your debts and ruining your credit.
I'm reading a biography on Harry Truman right now and he had partnered with somebody in 1919 on a men's clothing store. When the store failed, he had the option to declare bankruptcy. But instead, he worked out payment plans with his creditors and was still making those payments 20 years later, when he easily could have walked away in a bankruptcy filing. I believe he shouldered some of his partner's debt as well.
The benefit to Harry Truman was that his credit was always good and never had to borrow money on onerous terms.
And then there are student loans.