Robyn Burkinshaw again – Following up my first blog post, I wanted to expand on the ‘WHY I started Blytz’ topic as it relates to the timely subject of the underbanked. Through my early career experience with distressed consumer verticals, i.e. credit repair, foreclosure defense, student loan consolidation, I’ve really come to know the people and understand some of the challenges they face.
The non-banked and under banked populations are in the spotlight now as we move to a cashless society. I want to start by discussing what it means to be ‘non banked’ and/or underbanked, and how many people find themselves in this situation.
Non-banked or un-bankable consumers are people who typically have poor credit, or due to their immigration status, have been precluded from obtaining a social security number. In addition, repossessions, foreclosures, court judgments, tax liens, unpaid returned checks, are some other issues that lead traditional banks or credit unions to consider these people too ‘high-risk’ in providing checking or savings accounts.
If you glance at Wikipedia, they provide further insight mentioning that the ‘underbanked have a strong reliance on non-traditional forms of finance and micro-finance often associated with disadvantaged and the poor, such as check cash facilities, loan sharks and pawn brokers.’ The site also points out that the under-banked can have language barriers, and may be elderly populations limited through distance or technology familiarity.
Understanding this population leads to the question of what now? News flash! Our world is becoming increasingly electronic. If I can’t get a bank account or a debit card, how can I pay my power bill if the only option for collection is online bill pay?
Cash payments aren’t practical in the world of recurring bills. Can you imagine driving to the physical location of each service provider for the bills you pay monthly? For example, utilities, insurance, rent or a mortgage payment; that would be a huge logistical hassle. It’s not practical or universally applicable. Pre-paid card you say? Sure, if you want to pay high fees and run to ‘reload’ your card every payday.
Out of the 3.9 trillion recurring bills that transacted last year, 68% of people either chose not to or couldn’t participate in recurring option*. So, the under banked population is larger than we categorically understand.
Blytz was born of experiences with people who face these troubling dilemmas every day. In creating a payment mechanism that focused on making payments easy, it was important to me to speak to a variety of consumers, like the underbanked, who are often marginalized and overlooked, as well as those who function in middle America. It’s time we venture back to the days of community banking where people are treated as people, not just a number.
Ready for a better payment experience? Think Blytz.