Fintechs are Powering Unbanked Consumers to Receive, Hold & Spend Money

Thursday, August 5th, 2021

Thanks to the growth of payment solutions like e-cash, P2P, and mobile wallets especially throughout COVID, financial technology firms are providing the unbanked and underbanked with alternative ways to access capital, according to reports by the Electronic Transactions Association (ETA).

Carat

A case in point is Firsev’s creative solution Carat. This is a PIN-on-glass feature that accelerates the collection of electronic benefits transfer (EBT) cards from shoppers purchasing groceries over the internet.

Carat allows a vendor to generate a digital PINpad in their eCommerce ecosystem enabling EBT cardholders to approve each transaction. The newly-launched solution rolled out in 2020 in the heat of Coronavirus. It was purposely built to was to power unified digital payments and offer eCommerce services to companies selling to shoppers in fear of the virus.

Paysafecash

Paysafecash is yet another excellent solution powering the underbanked to enjoy money services. As coronavirus took over the globe, Paysafe Group launched Paysafecash, a service that allows shoppers to purchase goods online and checkout (with cash) at a physical payment counter. 

As soon as a shopper adds items to the cart and confirms that they are ready to pay, a barcode is sent via email, text message, or printable PDF. This code is also shared with more than 70 000 Paysafecash merchants. 

The shopper should carry this barcode to the physical merchant. After the merchant has scanned the barcode and collected the cash payment, they send the vendor proof of the completed transaction. Only after this confirmation can product shipment begin.

Paysafe Group’s service relies on multiple Paysafecash merchants. Some of the big names include CVS, Walgreen, Family Dollar, and 7-Eleven. 

“Such remedies are engineered to assist the unbanked and cash-only consumers, which mainly includes low-income shoppers, enjoy the full benefits of new shopping & payment methods,” says the ETA. 

P2P & Mobile Wallets 

P2P payments and Mobile Wallets are now a popular avenue as buyers seek new payment avenues in a contact-free business environment.

Last year studies by Pew Research show 98 percent of American adults own a mobile phone, and over 80 percent of them are smartphones. This result represented a noteworthy increase from 2019. 

Separate findings by the Federal Deposit Insurance Corporation show that m-banking is increasingly becoming a popular method of accessing accounts. In 2019,  34 percent of account-holding consumers used their phones as their primary means to view their accounts. This is a noteworthy increase from the 9 percent reported in 2015. This result places it beyond online banking as the most popular banking method.

The bottom line

Fintechs are at the forefront to help underbanked and unbanked customers enjoy financial services. So far, they have done an impressive job bridging the gap by offering hassle-free and secure ways to collect, hold and spend money.