Why Some Consumers Want To “Get Unbanked”

Why Some Consumers Want To “Get Unbanked”

Imagine our world today. You can buy the things you need without having to dress up and go out. You don’t need to carry huge amounts of cash, even if you are likely to spend a lot on certain days.

Sometimes, you don’t even need to bring your wallet. You can now pay for purchases using only your smartphone.

But for some people even having a bank account can be unrealistic. According to the Federal Deposit Insurance Corporation,  about 5.4 percent of American households were unbanked in 2019. That easily translates to 7.1 million households.

Blockchain technology paired with a mobile device has the ability to dramatically shift the level of access and fintech companies are jumping at the opportunity.  One company is unbanked.com, who is working to democratize access for people across the world and merge the benefits of blockchain and cryptocurrencies with bank accounts and debit cards to give consumers more choice and control. 

The Pitfalls of Being Unbanked

Having no access to a bank account with an insured financial institution is not only inconvenient, it also precludes you from being able to save for anything. One of the most obvious is that unbanked households find it difficult to use a savings account for emergencies.

According to Nerd Wallet, having a bank account can prevent people from having to live paycheck to paycheck. What’s more, being unbanked means that you have to do bank-related transactions such as cashing a check with an alternative service.

In this instance, you can go to a check-cashing service.  These firms usually charge a fee of about one to 10 percent of the check’s face value.

All things considered, Nerd Wallet writes that on average, you spend $196.50 more when you don’t have a bank account and have to use a prepaid debit card with the direct deposit feature.

If your card doesn’t give you a direct deposit, the additional costs for unbanked people will be close to $500. Overall, that’s around $1.8 billion to $4.5 billion being spent by those who are unbanked.

Predatory Loans

Imagine this. People can borrow up to $500, but most people borrow $250, $300, or $500.  On average, people borrow $392 from payday loans, according to the Consumer Financial Protection Bureau.

Having access to a bank account can help people avoid payday and other predatory loans, which can have three times the interest. It can also help you save money so you don’t have to get into loans that give you very little money and asks a lot in interest.

Affordable Alternative Service to “Get Unbanked”

Unbanked gives you access to a debit card with a direct deposit feature without the crazy fees that other services have. Unbanked keeps their fees to a minimum, including a very low $5 monthly fee that may be waived if you meet a certain level on non-cash transactions.

These are FDIC-insured accounts that you can fund with cryptocurrency. You get access to virtual and physical debit cards while also having the option to use these cards with Google, Samsung, or Apple Pay.

With Unbanked bank accounts, you can manage your cryptocurrencies and still deposit cash into your account. You can even do money transfers no matter where your recipient is. If you’ve ever been frustrated about how traditional banks are hesitant about cryptocurrency, Unbanked is probably the answer to your prayers.

What’s more, Unbanked doesn’t only work to eliminate the fees you do not like to pay to your bank, using the cards can also reward you with up to 6.38 percent when you use the debit card to make your purchases. And what’s in the works is even more exciting, as Unbanked is currently planning for a credit card service to support people in countries across the globe. 

The Unbanked website states “we are the financial institution that provides transformative products and services because we believe that financial access and control is a fundamental human right.”   With billions of people requiring access and more control over their currency, Unbanked could be one of the most important companies to help accelerate access. 

Ogwu Osaemezu Emmanuel

Ogwu Osaemezu Emmanuel is a graduate of Mass Communication and Media Studies. He joined the blockchain movement in 2016 when a friend of his introduced him to an investment platform accepting bitcoin. He has never looked back since then. Emmanuel believes the world needs real change and freedom from poverty. He sees crypto and the underlying distributed ledger technology as the catalyst to a better future for all.