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Unbanked and Underbanked Consumers in the U.S., 3rd Edition


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Unbanked and Underbanked Consumers in the U.S.,3rd Edition

The convergence in technology, mobile communications and regulatory change is shaping how banking and alternative financial services (AFS) providers tailor products and services to unbanked and underbanked consumers, while also causing lines to blur between P2P and remittances and between checking accounts and prepaid cards. In the process, traditional definitions of “unbanked” are being joining by such phrases as “the new middle class” and “tech-savvy college students,” changing target audiences accordingly. Meanwhile, the use of AFS products and services has entered the mainstream, with more than 3 in 10 U.S. adults using at least one type of AFS product in the last 12 months, underscoring the market opportunity for banks and non-banks alike in helping to meet underbanked consumers’ needs.

Unbanked and Underbanked Consumers in the U.S. analyzes trends shaping banking and alternative financial services products and services tailored to unbanked and underbanked consumers, giving industry participants the guidance they need to stay abreast of this growing and evolving market. The report assesses the following:

  • The characteristics of unbanked and underbanked consumers, including trending the percentage of consumers who are personally unbanked and are non-institutional unbanked, by demographic, for the period 2005-2013.
  • Via proprietary consumer survey analysis, underbanked, unbanked & unbanked alternative financial services (AFS) users, by demographic; the payment methods they use; and the alternative financial services they use.
  • AFS usage overlap and usage frequency overlap, as well as 2000-2013 unbanked and are non-institutional unbanked bill payment method trends.
  • Unbanked/underbanked banking product trends, by using FIDC survey data exploring why the unbanked do not have accounts; using proprietary survey data to explore unbanked, underbanked and fully banked account opening motivators; and exploring challenges and trends related to bank account penalty fees, small dollar bank loans, lines of credit, and account transparency.
  • How Model Safe Accounts are being applied in the marketplace, including the Citibank Access Account and the KeyBank Access Account; and we assess non-bank entrance via prepaid accounts that behave like checking accounts, including American Express’ Bluebird and Green Dot’s GoBank.
  • Trends shaping the alternative financial services industry, including check cashing, consumer loans, pawn loans, car title loans, and remittances, with accompanying participant analysis.
  • How and why banks and nonbanks are using general purpose reloadable prepaid cards to reach the unbanked and underbanked, including drivers and challenges; and prepaid card innovation, including Chase Liquid and PNC SmartAccess; and assess government issued prepaid card and employer payroll card trends.
  • The prevalence of smartphone access among unbanked and underbanked U.S. adults, including the relationship between unbanked status and smartphone ownership patterns among key unbanked and underbanked demographics; and we assess unbanked and mobile trends in Mexico.


  • Executive Summary
    • INTRODUCTION
    • Report Scope
    • Report Summary
      • Characteristics of Unbanked and Underbanked Consumers
      • Usage overlap among AFS loan products
      • Unbanked/Underbanked Banking Product Trends
      • Alternative financial services
      • Prepaid cards
      • Mobile and international trends
  • Characteristics of Unbanked and Underbanked Consumers
    • INTRODUCTION
    • Summary analysis
      • FDIC household analysis sets the stage
      • Packaged Facts analysis: personally unbanked & non-institutional unbanked
      • Drawing distinctions between underbanked, unbanked & unbanked AFS users
      • Usage overlap among AFS loan products
      • Method of bill payment: trends
    • Setting the stage: FDIC survey findings
      • Use of alternative financial services
    • Packaged Facts' long-term trend analysis
      • Table Unbanked Consumers, by Demographic, 2005-2013
      • Table Non-Institutional Unbanked Consumers, by Demographic, 2005-2013
      • Hispanic/Latino unbanked & non-institutional unbanked
        • Table Unbanked: All Consumers vs. Hispanic Consumers, by HH Income Bracket, 2005-2013
        • Table Non-Institutional Unbanked: All Consumers vs. Hispanic Consumers, by HH Income Bracket, 2005-2013
      • Full-time employment relationship to unbanked & non-institutional unbanked
        • Table Percent of Unbanked & Non-Institutional Unbanked: All Consumers vs. Full-Time Employed, 2005-2013
    • Regional and state-by-state analysis: 2013
      • Table Percentage of Unbanked Consumers, by Nielsen Marketing Region, 2013
      • Table Percentage of Unbanked Consumers, by State, 2013
    • Our 2013 unbanked/underbanked/fully banked/AFS user analysis
      • Our findings
        • Table Fully Banked, Banked, Underbanked, Unbanked, Alternative Financial Services (AFS) Users & Unbanked AFS Users, by Demographic, 2013
      • Use of financial products and services
        • Table Use of Payment Instruments & Loans: Fully Banked, Banked, Underbanked, Unbanked, Alternative Financial Services (AFS) Users & Unbanked AFS Users, 2013
        • Table Alternative Financial Services: Use in Last 12 Months, by Type; Have Payroll Card, 2013
        • Table Alternative Financial Services Use: Check Cashing, Money Order Purchasing, Pawning & Payday Loans in Last 12 Months, by Demographic, 2013
      • Cross-use of AFS loan products
        • Table Consumers' Use & Cross-Use of Alternative Financial Services, by Type & Frequency of Use, 2012
        • Table Unbanked Consumers' Use & Cross-Use of Alternative Financial Services, by Type & Frequency of Use, 2012
        • Table Underbanked Consumers' Use & Cross-Use of Alternative Financial Services, by Type & Frequency of Use, 2012
      • Bill payment preferences
        • Table Consumer Household Bill Payment Preferences: Cash, Check, Credit Card, Debit/Prepaid, Money Order, Online Bill Pay, 2009-2013
        • Table Unbanked Household Bill Payment Preferences: Cash, Check, Credit Card, Debit/Prepaid, Money Order, Online Bill Pay, 2009-2013
        • Table Unbanked w/ No Banking Relationship Household Bill Payment Preferences: Cash, Check, Credit Card, Debit/Prepaid, Money Order, Online Bill Pay, 2009-2013
  • Unbanked/Underbanked Banking Product Trends
    • INTRODUCTION
    • Summary analysis
      • Banks make strides with account transparency
    • Bank accounts: usage challenges and motivations
      • Why people do not have bank accounts
        • Table All Adults, Unbanked & Non-Institutional Unbanked: Percent Uncomfortable Trusting Money to a Bank, Agree a Lot & Any Agree, 2008-2013
        • Table Reason Household is Unbanked, by Race/Ethnicity, 2011
        • Table Reason Household is Unbanked, by HH Income, 2011
        • Table Reason Household is Unbanked, by Nativity and Spanish-Only Spoken in Home, 2011
      • Proprietary consumer survey analysis: account opening motivators
        • Table Motivators to Open Bank Account: Unbanked, Underbanked & Fully Banked, 2013
      • Why is a bank account important?
      • Overdraft concerns linger
      • More and more consumers denied account access?
    • Bank account innovation
      • Deposit advances
        • Table Comparison: Conventional Payday Loan vs. Bank Deposit Advance Loan, 2013
      • Lines of credit
        • Table Key Basic Line of Credit: Characteristics, 2013
      • Fee transparency
      • FDIC Model Safe Accounts
        • Table FDIC Model Safe Accounts: Core Features/Fees & Auxiliary Services and Fees, 2013
      • Bank innovation
      • In practice: KeyBank Access Account
        • Table KeyBank Access Account: Characteristics & Metrics, 2013
      • Non-bank innovation
        • Table American Express Bluebird: Fees and Characteristics, 2013
      • In practice: Green Dot's GoBank
  • Alternative Financial Services
    • INTRODUCTION
    • Summary analysis
      • Check cashers
      • Consumer loans
      • Pawn loans
      • Car title loans
      • Remittances
      • AFS industry participants
    • Alternative financial services: usage and reasons for use
      • Proprietary analysis
        • Table Fully Banked, Banked, Underbanked, Unbanked, Alternative Financial Services Users & Unbanked AFS Users, 2013
      • FDIC analysis
      • Reasons for using AFS
      • Transaction-based AFS
      • Credit-based AFS
      • Regulation significantly affects access and use of products
      • Industry trends
    • Check cashing
      • Table Unbanked, Underbanked & Fully Banked Who Receive Income as Checks & Who Use Check Cashing Stores: Population and Share, 2012
      • Table Average Percent Charged by Check Cashers, by Dollar Amount and Type of Check, Massachusetts, 2012
      • Table Fee Comparison: Check Cashing vs. Massachusetts Basic Banking, by Income, 2012
    • Consumer loans
      • Payday loans
      • Payday loans causing overdrafts?
      • Payday consumer complaints given voice?
      • Payday lenders pivot to installment loans
      • Pawn loans
        • Table CashPass Prepaid MasterCard Fees & Platinum Club Rewards Program, 2013
      • Car title loans
        • Table Car Title Loan Characteristics
    • Remittances
      • Operators
      • Channels
        • Table U.S. Adults Who Send and Who Receive Money: U.S.-to-U.S. and U.S. to/from International, 2006-2013
        • Table Percentage U.S.-to-International Money Senders Who Are Unbanked & Non-Institutional Unbanked, 2005-2013
        • Table U.S. Adults Who Send Money: U.S.-to-International, Methods Used in Past 12 Months, 2010-2013
      • Convergence of P2P and remittances
      • Remittance costs declining
      • Online methods generally cheapest; banks are in the middle
        • Table Cost to Send $200 from U.S. to Mexico, by Remittance Service: Q1 2013
    • Proprietary survey analysis: U.S. immigrants remitting to Mexico
      • Respondent analysis
        • Table U.S. Mexican Immigrant Remitters: Basic Demographics, Banking Relationships & Amount Sent: 2013
        • Table U.S. Mexican Immigrant Remitter's Primary Method of Sending Money to Mexico: 2013
        • Table U.S. Mexican Immigrant Remitters: Primary Method of Receipt in Mexico: 2013
      • Qualitative participant assessments
    • Industry participants
      • Advance America/Grupo Elektra
        • Table Advance America/Grupo Elektra Location, Q1 2012 vs. Q1 2013
      • Cash America
      • DFC Global Corp.
      • EZCORP
      • First Cash Financial Services Inc.
      • MoneyGram
      • Western Union
        • Table Western Union MoneyWise Prepaid Card Fees, 2013
        • Table Walmart MoneyCard Basic, Preferred and Plus Prepaid Card Fees, 2013
      • World Acceptance Corp.
    • Disruptors
      • Xoom
      • An enticing value proposition
      • Start-ups harness technology to enhance remittance/money transfer process
  • Prepaid Cards
    • INTRODUCTION
    • Summary analysis
      • General purpose reloadable prepaid cards
      • Government-issued prepaid cards
      • Employer payroll cards
    • General purpose reloadable prepaid cards
      • Market opportunity
        • Table Prepaid Card Use in Last 12 Months: All Adults, Unbanked & Institutional Unbanked, 2010-2013
      • Industry growth drivers
      • Challenges
      • Prepaid ATM fee advantage
    • Bank prepaid innovation
      • In practice: Chase Liquid
        • Table "How Chase Liquid Works": Web Marketing Graphic, 2013
        • Table Chase Liquid Customers: New to Bank vs. Existing, Banking History & Banked Status, 2013
      • In practice: PNC SmartAccess
    • Non-bank prepaid innovation
      • Green Dot
        • Table Walmart MoneyCard Card Fee Plan, Basic, Plus and Preferred Card Options, 2013
    • Government-issued prepaid cards
      • Direct Express
        • Table Direct Express Prepaid Debit Card Fee Analysis, 2013
      • PayPerks
    • Employer payroll cards
      • Fee concerns and forced acceptance
  • Mobile and International Trends
    • INTRODUCTION
    • Summary analysis
    • United States
      • Who's got a smartphone?
        • Table Percent of U.S. Adults Owning Mobile Phones & Smartphones, with Smartphone Share, by Demographic, 2012-2013
        • Table Percent of All Unbanked & Non-Institutional Unbanked Adults Who Use a Smartphone, by Demographic, 2013
    • Mexico
      • Challenge: the rural and impoverished
        • Table Mexico Urban and Rural Poverty headcount Ratio: 2011
        • Table Cash, Credit Card, Debit Card, Prepaid Card, Check & Money Order Usage, by Consumer Expenditure Category: 2013
    • Global payment networks
  • Appendix
    • Methodology
      • Consumer survey methodology
      • Terms and definitions
      • Other terms and definitions

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