Due to the rise in financial solutions like P2P, e-cash, and mobile wallets, more so amid COVID, fintech companies are bridging the gap in access to capital for underbanked and unbanked customers, stats from the Electronic Transactions Association (ETA) show.
Carat
For instance, Firsev Inc. has pioneered Carat, a PIN-on-glass tool that speeds up the acceptance of electronic benefits transfer (EBT) cards from consumers buying groceries online.
In essence, Carat enables sellers to form a digital PINpad in their digital-commerce ecosystem that allows EBT cardholders to confirm each payment. The solution rolled out last year. Its primary goal was to sell unified digital payments & relevant ecommerce services to established firms serving Covid-wary consumers.
Paysafecash
Also promising is another remedy bringing the underbanked and unbanked closer to financial services is eCash. In the heat of COVID, Paysafe Group rolled out Paysafecash, a platform that enables shoppers to buy items online and pay at an outdoor payment counter with cash.
Once you’ve bought the goods online, the shopper receives a barcode through email, SMS, or printable PDF. The same code is sent to over 70 000 Paysafecash merchants.
Once the merchant scans the barcode and collects the cash, they inform the online seller of the successful transaction. After this confirmation, product shipping begins.
Paysafecash works with several Paysafecash merchants, including popular platforms like Walgreen, Family Dollar, 7-Eleven, and CVS.
According to the ETA, the solutions are pioneered to help the underbanked and cash-dependent shoppers, who are mainly low-income, to enjoy the full advantage of new payment solutions.
P2P & Mobile Wallets
Peer to Peer payments and Mobile Wallets are also gaining a foothold in the market as shoppers search for new payment avenues in a contactless ecosystem.
2020 Stats from Pew Research revealed that 98 percent of US grownups have a mobile phone, and 81 percent of those are smartphones, yet another jump from 2019.
Furthermore, the Federal Deposit Insurance Corporation found that m-banking has significantly flourished as the staple way to access accounts. The latest stats (2019) show 34 percent of customers used their phones as the staple way to enter their account, a significant jump from 2015’s 9 percent. This figure puts it beyond online banking as the most used banking method.
The bottom line
These fintech solutions are a gamechanger for the underbanked. They eliminate the banking gaps by providing them a simple way to receive, hold and utilize their funds without worrying about security.
Author Bio: Content crafter Alex Wilmont has been active in the payments industry for over 15 years. He lives simply, gives generously, and loves his 2 dogs. Alex helps merchants solve their payment problems through Pinwheel Pay. His mission is to enhance and innovate the fintech industry for years to come.