Underbanked

Recreating this industry involves regulation that more effectively aligns the interests of lenders and borrowers, consumer education and outreach and market-driven solutions.

Many problems with payday products are concocted by activists and politicians with mercenary intent who are more interested in squelching innovation than letting people make choices for themselves.

Revisiting the way banks, credit unions and nonbank lenders operate (and collaborate) will offer choices, protections and a path to greater financial security.

Several tech startups have made short-term credit the focus of their business models. But could a product so universally frowned upon ever achieve mainstream acceptance?

More than two billion people worldwide do not have a bank account, but do have a mobile phone, making the device a direct conduit to an underserved demographic.

Why does an industry so often criticized for charging high fees to low-income consumers think it can win over critics by adding members of the 1% to the payroll?

Consumers who travel with debit or credit cards have no obligation to report their bank account balances or the size of their credit lines. Certainly those who rely on prepaid cards to access financial services should be entitled to the same rights.

The terms 'unbanked' and 'underbanked' perpetuate the erroneous notion that everyone needs a bank account and inhibit discussion of better ways to serve the financial needs of non-traditional consumers.

Proposed legislation that encourages utility companies to report positive payment data is just one way to improve underserved consumers' access to high-quality credit products they can truly afford.

Critics of nonbanks contend that consumers use "high-cost" alternatives because they are financially illiterate. But, like most simplistic conclusions, this one is seldom accompanied by facts and is as wrong as it is demeaning of the innate intelligence of these consumers.

A small number of alternative financial services providers would be permitted to operate nationwide and on the Internet without adequate policing of their products for underserved consumers.

Full-service bank customers have a tough time understanding the appeal of prepaid cards to the unbanked, and can't relate to feeling comfortable with all those fees. But it sure beats being surprised by them.

Wells Fargo says its remittance transaction volume grew at a record pace of 27% in 2011 over the prior year, thanks in part to substantial growth on the East Coast where the bank has largely finalized conversions of former Wachovia branches.

United Bankshares in Charleston, W. Va., and local organizations in the Washington area figured out that cooperating on a bike program could improve big-city commutes, recruit new customers and help the unbanked.

m-Via has built a mobile payment network designed to provide immigrants with a low-cost, safe alternative to higher-fee money transfer services like Western Union.

Some banks are starting to notice the poor customers they have long ignored. Regions Financial Corp. is one of several banks expanding its check-cashing and the other "alternative" financial services that have long been offered by Wal-Mart and other non-banks.

United Bank offers its underbanked customers checking accounts with...checks. The FDIC has even taken note of their unique approach.

Through a deal with money-transfer company UniTeller, Wells Fargo & Co. is expanding its remittance network by adding access points in Latin America and Asia, in an attempt to gain more money-transfer business from former Wachovia Corp. customers.

Visa Inc. has hired Gavin Krugel to work on its global mobile team, in an effort to reach unbanked consumers in developing economies.

Think Finance has hired William A. Kontgis as chief information officer to help develop products for the unbanked.