Low-income neighborhoods have become bank deserts where African-American households cannot get access to low-cost financial services, but prepaid cards can help, according to Clayola Brownm, the president of the A. Philip Randolph Institute.
Payroll and prepaid cards are powerful tools to make sure people have more money in their pockets and that our money stays in our community. And the best news is that they are affordable and can be made more easily accessible through outreach and education efforts.
Mercator Advisory Group has done spot analysis on low-income zip codes in the past. The analysis has shown that there is paucity of bank branches and bank-sponsored ATMs. For individuals living in those areas, the ability to access funds without paying fees at an ATM, and the ability to access a bank branch to make deposits or withdraw cash is limited. However, those same zip codes often contain multiple reload sites and ATMs that are part of fee-free networks that prepaid provides subscribe to.
The concern now is whether or not new regulations are prepaid cards, arbitration, and money laundering will come together in a perfect storm that will deprive these low income people of prepaid cards and send them back to a cash-based existence.
Overview by Ben Jackson, Director, Banking Channels Advisory Service at Mercator Advisory Group
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