We’ve reported on how people in emerging markets residents are opening bank accounts and paying for things with their mobile phones, transforming business in those countries. But the US Federal Reserve would like you to know (pdf) that the changes aren’t all in other parts of the world. Poor people in the US are some of the most avid users of mobile banking and mobile payment systems.
In fact, they’re likely to be the first adopters. And when you look at why, it turns out to be for similar reasons to why people in emerging markets have embraced mobile banking and payments: a lack of access to traditional banking.
Around 9.5% of Americans said they were completely “unbanked,” meaning they didn’t have a savings, checking, or money market account. (In Kenya, for comparison, the proportion is 70%.) Meanwhile, 10% are ”underbanked”—which the Fed defines as “people with bank accounts but who use check cashers, payday lenders, or payroll cards.”
But despite being among the poorest, most of these people—59% of the unbanked, and 90% of the underbanked—have mobile phones, and around half of them are smartphones. And this makes them pretty different from the rest of the US:
- Of underbanked consumers with phones, 49% use mobile banking, versus just 28% of all people in the US with mobile phones.
- 30% of underbanked residents have used mobile payments in the last 12 months, compared to 15% of the total population of mobile phone users.
Also intriguing is that the percentage of the population without a bank account is slowly declining, from 10.8% in 2011 to 9.5% in 2012. Whether that’s because prosperity is returning, banks are reaching more people, or mobile banking is encouraging more people to sign up for accounts, the Fed doesn’t say.
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