Sorry, my comment was disjointed.
I didn’t mean to say they should use pawn shops instead of payday loans. They probably would if they could.
My point was the amount of interest on the loaned amount is super low compared to the payday loans. IIRC ~10% in most states. I am sure part of that is due to the loan being worth less than the collateral, and part due to previous consumer protection laws. But still, the interest rates are insane at the payday loans.