2016 No. 16–05

Research Data Reports

Financial Inclusion and Consumer Payment Choice Financial Inclusion and Consumer Payment Choice

By Allison Cole and Claire Greene

Many U.S. policymakers believe that access to safe and affordable financial services is important for dealing with unexpected expenses, avoiding unnecessary fees, establishing the ability to borrow, and saving for the future, and that lack of such access is a sign of financial and civic marginalization that public policy should address.

One aspect of financial inclusion is access to the mainstream payments system, which enables one to conveniently receive funds, make purchases, and pay bills. This research data report identifies consumers according to their banking status in order to see how they receive funds and make payments.

The authors examine the demographic characteristics and use of payment instruments of three groups of U.S. consumers: those without a checking or savings account (unbanked), bank account adopters who have used alternative financial services (AFS) in the past 12 months (underbanked), and bank account adopters who did not use AFS in the past 12 months (fully banked). Understanding payment choices made by consumers—especially those with weak attachment to the banking system—is potentially useful for researchers and policymakers studying financial inclusion, for innovators designing new financial products, and for financial educators seeking to understand consumer decision making.

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