How US Consumers without Bank Accounts Make Payments
Using data from the 2021 Survey and Diary of Consumer Payment Choice, this article investigates two questions: What payment instruments do consumers without bank accounts adopt? How do these consumers make payments?
- Consumers without bank accounts rely heavily on cash for purchases, bill payments, and payments to other people.
- Consumers without bank accounts are about half as likely to have set up nonbank payment accounts like PayPal, compared to consumers with bank accounts.
- Compared to banked consumers, unbanked consumers adopt different types of special-purpose prepaid cards. They are more likely to have cards related to receipt of income, including payroll cards and cards for receiving government benefits.
- Consumers without bank accounts report using bank account–linked instruments to make payments, perhaps due to payments access provided by friends and family.
Center Affiliation: Economic Survey Research Center
JEL classification: D63, E42, J15
Key words: Unbanked consumers, payment choice, payment card adoption, payments inclusion
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