The unbanked are described by the Federal Deposit Insurance Corporation (FDIC) as those without an account at a bank or other financial institution and are considered to be outside the mainstream for one reason or another. The under banked are people that have poor access to mainstream financial services such as banks and so rely heavily upon alternative financial services targeted at low income people such as check cashers, pay day lenders, pawnbrokers and other non-traditional banking services.
So who are the under banked? The under banked are employees that have limited or no access to a checking or savings account. According to recent reports, unbanked and under banked individuals were more likely to be:
• Younger – Over 56% were younger than 45.
• Lower income – The average amount of a paycheck cashed by check cashing services is $500-$600.
• Minority – 46% of U.S. born black individuals and 34% of U.S. born Hispanic individuals were unbanked.
• Immigrants – 53% of immigrants from Mexico, 37% from Latin America, and 20% of Asian immigrants were unbanked
50% - amount of workers who have previously had a bank account in the past and have chosen to be unbanked due to dissatisfaction with traditional banking products.
One of the most expensive segments of the work force for payroll distribution are unbanked and under banked employees. According to a report released by the FDIC, on January, 2009, roughly 25% of the workforce, or 40 million adults residing in the United States today, have little to no interaction with federally regulated financial institutions. The under banked are working with you.
Some types of businesses tend to have larger numbers of unbanked employees than others. These industries include retail, hospitality, delivery services, temporary staffing, landscaping, construction, manufacturing and many others.
rapid! PayCard offers an alternative to paper checks that you can offer your unbanked employees. Payroll cards provide employees without bank accounts and employees with limited access to banking services with a free and convenient means of accessing their full wages on payday. The rapid! paycard requires no back ground or credit check and does not require an existing bank account.
This solution helps bring the unbanked and underserved employees into the financial mainstream and offers them greater convenience and better options on payday than the traditional bank accounts they have rejected.
Follow these links to read more information on who is unbanked:
http://www.usatoday.com/money/industries/banking/2009-12-01-underbanked_N.htm
http://www.usatoday.com/money/perfi/general/2007-06-23-banklessinamerica_N.htm?loc=interstitialskip
