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Should there be more mobile credit card processing opportunities for the underbanked?

September 21, 2011

A recent report from global consultancy firm Celent urged financial institutions to broaden their mobile credit card processing services to the underbanked, the Credit Union Times reports.

A recent report from global consultancy firm Celent urged financial institutions to broaden their mobile credit card processing services to the underbanked, the Credit Union Times reports.

Bart Narter, analyst at Celent, released Reaching Underbanked Consumers Through Mobile Services in late August, and suggested that because many underbanked individuals live paycheck-to-paycheck, they may prefer to be constantly aware of their balances via mobile phone.

Narter also pointed out that 96 percent of the population uses mobile phones, and mobile access is consistently high across all demographic and socioeconomic groups. Hispanics, African Americans and younger, underbanked consumers are among the heaviest users of text-messaging on mobile phones.

“Given the comfort and attachment that people feel with their mobile phones, and considering that many financially underserved consumers are uncomfortable with banks, mobile devices hold considerable promise to provide broad access to financial services,” the report stated.

However, the report also sees the reality of the situation, that advanced mobile wallet solutions such as near field communication technologies won’t affect underbanked consumers without smartphones. Also, and mobile payments typically aren’t used as ways to serve new accounts – but rather as extensions of existing ones.  

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