July 21 – The Electronic Transactions Association (ETA), the global trade association representing the payments technology world, has released a white paper that explores how ETA member companies are driving financial inclusion and access by using technology to deploy innovative products and services.
Over the past decade, financial institutions and financial technology companies have introduced new products and services that expand access to underserved communities. Providing increased access to ATMS for the disabled, allowing the elderly to deposit checks remotely, or expanding access to credit for small business owners are just a few examples of how the financial institutions and the fintech industry are making huge strides to achieve an inclusive financial system that addresses the needs of underserved populations. You can access the paper here.
The white paper highlights the many ways in which ETA members are using technology to address the financial needs of underserved consumers including:
- Mobile Payments
Mobile payments are an exciting alternative to cash and checks that allow consumers to pay for goods and services in an efficient, cost-effective, and secure manner. Eighty-seven percent of the U.S. adult population has a mobile phone, and seventy-seven percent of mobile phones are smartphones. Twenty-four percent of all mobile phone users and twenty-eight percent of smart-phone users have reported making a mobile payment in recent months.
- Online Small Business Lending
Online small business lending is expanding access to credit for small businesses. This critical access to capital allows business owners to invest in their employees, purchase more inventory, expand their services and ultimately grow their businesses. Using sophisticated, data-driven algorithms to assess the creditworthiness of potential borrowers, lenders are able to reach funding decisions quickly and efficiently while providing access to capital for approved borrowers expeditiously.
- Prepaid Products
Prepaid cards have shown demonstrable benefits for the underserved. Providing America’s 68 million underbanked adults with access to a prepaid card not only makes their money safer, it opens up the increasingly important world of online transactions, moving these consumers into mainstream financial services.
- Mobile Banking
Research finds that a large percentage of the underserved populations have access to mobile banking. One example of a demographic that has benefited immensely from the emergence of mobile banking is the disabled population. The touch screen-only accessibility features for the disabled allow a person to single tap on any portion of the screen to hear an audible description of the button they are touching, and then to double tap to activate that button.
- Peer-2-peer Payments
The primary use for P2P is to easily and securely split the cost of goods or services rather than relying on cash or check for reimbursement. A 2014 Nielsen report found that millennials account for more than 50 percent of those who use payment apps. Paypal’s peer to peer lending app, Venmo, has already carved out a niche among younger consumers in the US, processing $2.1 billion in just the third quarter of 2015. Forrester Research estimates that the total P2P payments market will reach $17 billion in transaction volume by 2019.
- Expanded Internet Access
ETA member companies are working to expand affordable access to the internet in underserved communities, by improving the infrastructure and reducing the costs so that more people can connect to the web-based world.
- Interactive, Automated Tellers
Technologies like interactive tellers allow banks to operate branches with more services and at lower costs, reaching more communities than was previously possible. The 24-hour interactive service makes banking accessible to consumers who may have found it difficult to access these services in a more traditional manner. Those who benefit from these innovative products and services include low-income consumers who work non-typical hours, those living in rural communities, and the disabled population.
- Financial Literacy & Readiness
Financial literacy empowers consumers to take control of their finances and prepare for the future. There are a number of product and service offerings made by ETA companies to help expand financial literacy to consumers.
For questions on the white paper, please contact Scott Talbott, firstname.lastname@example.org.
The Electronic Transactions Association (ETA) is the global trade association representing more than 500 payments and technology companies. ETA members make commerce possible by processing more than $5 trillion in purchases in the U.S. and deploying payments innovations to merchants and consumers.