The Federal Deposit Insurance Corporation (FDIC) published a recent survey. The survey explored long-term trends in the banking and non-banking financial services space. Between 2011 and 2021, the percentage of people who were unbanked fell 3.7 percentage points to 4.5%. This is roughly 5.9 million U.S. households. The unbanked are those who don’t have a bank account.
What’s more, the FDIC report found that “check cashing use fell from 7.9% in 2011 to 3.2% in 2021, while money order use fell from 18.8% to 9.7%.”
We’ve previously covered how the number of unbanked people has declined over time. Some people are turning to fintech solutions, instead of banking solutions. In fact, one PaymentsJournal article discussed how some mom-and-pop bodegas are turning into “fintech hubs,” to help support their customers.
Sophia Gonzalez, Research Analyst of Debit at Mercator Advisory Group, recently wrote an article about Earned Wage Access (EWA), which allows employees receive earnings before payday, and can therefore be a substitute for payday loans.
“With the availability of EWA, people are preferring that over payday loans,” she said. “These solutions may make it possible for people to have a daily paycheck, instead of biweekly or monthly. The solutions also come from companies themselves, instead of banks, following the payments trend where much of the innovation is being done outside of traditional financial institutions.”
