Claire Greene, Fumiko Hayashi, Alicia Lloro, Oz Shy, Joanna Stavins, and Ying Lei Toh
Research Data Report 24-3
October 2024
US households that lack digital means of making and receiving payments cannot participate fully in an increasingly digitized economy. Assessing the scope of this problem and addressing it requires a definition of households that are underserved in digital payments. Traditional definitions of households underserved in the banking system—those that are unbanked and those that are underbanked—do not account for the ownership of nonbank transaction accounts that can be used to make and receive digital payments. In this paper, we define households underserved in digital payments by considering four key elements—access, use, safety, and affordability—and discuss how researchers may assess these elements to quantify the share of households underserved in digital payments.
JEL Classifications: D12, D18, G21, G23
Key words: Digital payments inclusion, underserved, fintech, nonbanks
https://doi.org/10.29338/rdr2024-03
Claire Greene is center director and Oz Shy is senior policy advisor and economist, both at the Federal Reserve Bank of Atlanta. Fumiko Hayashi is vice president and Ying Lei Toh is senior economist, both at the Federal Reserve Bank of Kansas City. Alicia Lloro is principal economist at the Federal Reserve Board. Joanna Stavins is senior economist and policy adviser at the Federal Reserve Bank of Boston.
This report, which may be revised, is available on the Atlanta Fed website, atlantafed.org.
The authors thank Paola Boel, Brian Clarke, Ken Isaacson, Jessica Washington, participants in the Federal Reserve System Payments Researchers' Underserved Discussion Group, and seminar participants at the Federal Reserve Bank of Kansas City for helpful comments and Kevin Foster for assisting us in analyzing data from the Survey and Diary of Consumer Payment Choice. This paper is an outcome from the "Payments for All" work group focusing on payments inclusion, which is part of the Federal Reserve System's Economic Inclusion Commitment initiative.
The views expressed in this paper are those of the authors and do not necessarily represent the views of the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of Atlanta, Kansas City, or Boston, or the Federal Reserve System. The authors are responsible for any errors.