ATLANTA—A significant number of college students and recent grads are turning to alternative financial services providers—including payday lenders—for their banking needs, according to a new Synergistics study.
The survey, "Evaluating the Financial Needs of Students," shows more than four in 10 use convenience stores for activities such as cashing checks, buying money orders or using ATMs. A similar number report using bank branches in supermarkets or retail stores. About three in 10 have used check cashing centers.
The national Internet survey reached 1,011 students and recent graduates—510 college students ages 17 to 27 and 501 recent (within the past seven years) college grads ages 21 to 32.
Of this group, one-fifth have used pawn shops, one in six short-term loan companies and one in eight car title lenders. Overall, close to eight in ten college students and recent graduates indicate experience with at least one alternative financial services provider.
"The ongoing and widening role of alternative providers and channels is beginning to gain much attention in the financial services industry," said COO Genie Driskill. "Once thought of as only providing services to lower-income or unbanked and underbanked households, alternative providers and channels appear to be gaining wider appeal among many consumer segments."
Driskill said that findings from the student and recent graduate survey are similar to results Synergistics has seen in other consumer studies that show that alternative providers and channels—although not displacing traditional financial institutions—are capturing a significant share of check cashing, money order, wire transfer and ATM transaction business.
