Reaching the underbanked and unbanked populations
Dec 07, 2012 Dave King
The Street recently listed some of the most effective ways banks and merchants can reach the underbanked and unbanked populations, as well as the benefits of using such services. According to the news provider, online banking is growing in popularity among all consumers, including the underbanked. However, because the game is changing, so too are the approaches to the services. For example, many companies that provide prepaid cards will offer online services to either load or transfer funds onto the account from checks or other plastic cards. Additionally, the source suggested that, when used properly, these services can give merchants opportunities to improve customer experiences. The most convenient payment processing procedures will be the most successful facilitators of underbanked and unbanked participation. Additionally, where alternative financial services were once more expensive than traditional counterparts, this has shifted, with prepaid cards and mobile payment processing capabilities becoming more affordable than other options. Businesses should focus on adapting their systems to drive revenues in the coming year, when mobile payments and prepaid cards are expected to skyrocket. Positives of alternative financial services
The behaviors of underbanked and unbanked populations were once difficult to gauge, as the groups inherently offer less financial information. However, because prepaid cards and mobile payments facilitate the aggregation of data that was once only possible with credit and debit accounts, advocates are beginning to get a better picture of what it takes to reach such households. The Street noted that overdrafts, yearly account fees and other costs were among the biggest deterrents for unbanked populations. Now, more prepaid cards are giving individuals the opportunity to take advantage of the benefits of financial services and leaving out the costs that drive away consumers.