Payment Aspects of Financial Inclusion (Revista da Procuradoria-Geral do Banco Central)

Summary

• In the United States, 16.7 million adults or 6.7% of the adult population were unbanked in 2013, and an additional 50 million adults (20%) were underbanked.p.13
• A majority (57.5%) of unbanked US households cited not having enough money for an account as one reason, and 35.6% cited it as the main reason.p.13
• Dislike of or distrust in banks was reported by 34.2% of unbanked households as one reason and by 14.9% as the main reason.p.13
• High or unpredictable account fees were cited by 30.8% of unbanked households, and by 13.4% as the main reason.p.13
• E-money purchase transactions had a 2.62% share of electronic payments in the euro area in 2013, and e-money issued stood at €6.6 billion in 2014.p.20
• Of 177 licensed EMIs in the EU, 48 are in the United Kingdom and 38 in Denmark.p.20

Key insights

1. The report is premised on retail payment systems being critical for financial inclusion and on a transaction account being an essential financial service and gateway to others.p.8
2. Transaction accounts are defined as accounts, including e-money and prepaid accounts, held with banks or other regulated payment service providers that can make and receive payments and store value.p.8
3. Even in high-income countries a substantial share of adults is unbanked, as the US example shows.p.13
4. High fees affect all users, but their impact is magnified for low-income users, for whom per-transaction fees weigh more on small-value payments.p.14
5. Reliance on cash in informal economies reduces the value proposition of transaction accounts for all users.p.15
6. Directive 2014/92/EU gives all EU consumers the right to open a payment account with basic features.p.22
7. Foundations for access are stakeholder commitment, the legal and regulatory framework, and financial and ICT infrastructures.p.27