PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Banking the Unbanked: How to Become Part of the Solution

PaymentsJournal by PaymentsJournal
May 4, 2021
in Featured Content, Mercator Reports
0
Banking Unbanked digital capabilities

Banking the Unbanked: How to Become Part of the Solution

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

The United States boasts the largest economy in the world. Even so, millions of households remain unbanked, meaning no one in the household has a checking or savings account at a financial institution. 

According to the Federal Deposit Insurance Corporation’s (FDIC’s) most recent report, 7.1 million households (5.4%) in the United States fit the definition of unbanked. The same holds true for 14 million individuals, or 5.5% of the adult population.

While these numbers are staggering, they actually reflect a downward trend in the number of unbanked households and individuals in the U.S. In fact, they represent the lowest level of individuals and households without a checking or savings account since the FDIC initiated its unbanked study over a decade ago.

Unfortunately, however, COVID-19 impeded some of this progress. Nearly every aspect of the payments industry was impacted by the pandemic, and the state of the unbanked and underbanked market is no exception. The FDIC predicts that due to the negative economic impacts of COVID-19, including skyrocketing unemployment rates, the unbanked population is likely to increase. 

The federal government struggled to get stimulus funds into the pockets of the nation’s unbanked during the pandemic. In a recent PaymentsJournal article, Mercator Advisory Group Director of Debit and Alternative Products Advisory Service, Sarah Grotta, discussed this issue.

“Much has been written in the popular media about how difficult it has been to distribute stimulus funds to all eligible recipients quickly. There are two central reasons for this: a) individuals do not trust the federal government with their checking account credentials that could facilitate a fast and safe direct deposit of funds, and b) they don’t have an account,” she wrote. 

Reaching the unbanked can be a challenge, and although the number of unbanked households is trending downward, COVID-19 has served as a new barrier in reducing these numbers further.  

The good news is that there are still opportunities for banks, credit unions, and fintechs to help fill the gap by offering services to this population. In fact, there are already instances of this happening both nationally and globally.

“Already a leader in the India based e-commerce market, Paytm is providing its merchants value by modernizing their QR Code solution, originally deployed to accept payments from the second largest unbanked population in the world,” wrote David Nelyubin, Senior Research Analyst of Emerging Technologies Advisory Service and Worldwide Payments Model at Mercator Advisory Group, in another PaymentsJournal article.

To successfully serve the unbanked population, it is important for financial services organizations to have a deep understanding this market and recognize why many households are choosing to remain unbanked.

In a new report from Mercator Advisory Group, “The U.S. Unbanked Issue Is Improving: Are You Part of the Solution?,” Mercator’s Sarah Grotta takes a look at the size of the unbanked market in the United States, the role fintechs play in closing the service gap for that market, and potential solutions to bank the currently unbanked.

Tags: BankingCovid-19FDICMercator Advisory GroupstimulusUnbanked
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Mercator Advisory Group analysts and industry professionals.

    Must Reads

    live shopping, ebay

    Q&A: eBay Exec on Live Shopping and the Future of Payments

    March 24, 2023
    AI and Biometrics in Regulatory Compliance in Finance

    The Importance of AI and Biometrics in Regulatory Compliance in Finance

    March 23, 2023
    Everyone Benefits from the Real-Time Payment Networks  

    Everyone Benefits from the Real-Time Payment Networks  

    March 22, 2023
    commercial payments

    Optimizing Commercial Payments in the Digital Age

    March 21, 2023
    cross-border payments

    Cross-Border Payments: Fighting
    E-Commerce Fraud Using Data

    March 20, 2023
    fraud, ChatGPT-4

    How to Fight Fraud While Still Enabling a Great Online Customer Experience

    March 17, 2023
    RTP

    Financial Institutions Without an RTP Strategy Risk Being Left Behind

    March 16, 2023
    visa chargeback

    New Visa Chargeback Guidelines Will Be a Game Changer

    March 15, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result