ETA Research Finds FinTech Industry Expanding Access to Underserved Communities

White Paper Examines Products and Services Geared Toward Financial Inclusion for Broader Constituencies

ETA today released their annual white paper exploring how FinTech companies are driving financial inclusion and access. Over the past decade, financial institutions and financial technology companies have transformed the financial landscape through the introduction of new technologies that expand financial offerings for consumers, lower costs, improve financial management, and increase transaction security. These products and services have also expanded, and are continuing to expand, financial opportunities for underserved consumers.

The White Paper, entitled How Fintech is Addressing the Financial Needs of the Underserved, highlights the many ways in which its members are using technology to address the financial needs of underserved consumers including:

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.

Mobile Banking Services and Innovations in ADA Compliance
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. Mobile banking gives disabled customers the tools to bank on their own from home, removing barriers to access like travel and increased costs. ETA companies have also designed tools for merchants to easily comply with ADA rules giving disabled customers more freedom and accessibility.

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.  ETA member companies are leaders in mobile payments, offering the secure tool to consumers, as well as encouraging merchants to accept mobile payments at checkout. The adoption rate of mobile payments by consumers and merchants in the U.S. is on the rise with a projection that in-store mobile payments will reach $75 billion in 2017 and $503 billion by 2020. ETA is encouraged by this favorable trend and sees value for consumers in the access, ease, ubiquity, and security of mobile payments as well as technology features beyond the capabilities of plastic cards, including loyalty programs, location-based offers, and other capabilities that enhance the point-of-sale experience.

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.  Paypal’s P2P app, Venmo, in existence just three years, has carved out a niche among younger consumers in the U.S.  In 2016, total transaction volume reached $17.6 billion, surpassing estimations for the entire P2P market by three years. Venmo continues to see explosive growth, reaching a record $6.8 billion in transactions in the first quarter of 2017 alone.

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.

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 prepaid products not only makes their money safer, it opens up the increasingly important world of online transactions, moving these consumers into mainstream financial services.

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.

For questions on the white paper, please contact Scott Talbott, [email protected].

About ETA

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.