Whilst at MEF Americas 2011 I was amazed to hear the statistic that around 60 million US citizens are ‘unbanked’… that is ‘without a bank account’. I was aware that many in developing economies chose not to or were unable to access banking services, but author Gary Schwartz explained it was also a widespread – and under reported – issue in the US.
Some – a minority he suggested – choose to avoid the banking system for political reasons but for the remainder the inability to perform cash-less transactions was a source of misery as payments required them to visit service providers or to pay higher charges (such as for utility bills). Gary explained that increasingly mobile devices were being seen as a way to store value and a potential way for even those without bank accounts to perform electronic transactions.
In the video Gary summarises the panel discussion and highlights some broader changes mobile is having on the way consumers interact and buy with mobile. SMS and mobile web – he argues – should be the ‘dominant’ channels because they are so widely used (and loved) by consumers.
Why is being unbanked a problem to folks who live within their means is a better question? Perhaps financial questions need a better response than simply making (taxable) financial storage mechanisms more readily available.
The claim is that they are disadvantaged by being penalised – both in cost and time – by making cash / in-person payments. The argument is not that they should be encouraged to hold complex financial products, but that allowing access to digital payments (even through mobile, without any link to a bank) gives them the benefits payment / credit / electronic cash users already have…. It’s especially an issue (as Gary told me off-camera) in Mexico where a bank failure caused wide-spread mis-trust of banks, but the knock-on effects go far wider.