Financial innovation and technology are allowing people to choose how they pay, using methods beyond cash, check, or card—but whom are the tools reaching? As more people use fintech to pay and be paid, how can the industry ensure that the payment methods are accessible to people who have limited access to banking products?
These questions were the focus of a recent PeachPay meeting at the Federal Reserve Bank of Atlanta. The meeting, titled "Payment Innovations Driving Financial Inclusion," provided insight into how the Atlanta Fed views payments and financial inclusion, presented case studies, and described research into how and when people use cash for payments. It ended with a discussion about the role of innovation hubs and business incubators in linking payments technology to financial inclusion.
Atlanta Fed president Raphael Bostic and senior vice president Mary Kepler opened the event with remarks on the Atlanta Fed's focus on payments innovation and economic mobility. They noted how technological changes increase financial inclusion, which in turn boosts economic mobility. "Fintech products and solutions have the potential to help low-income people better manage financial affairs, improve credit ratings, and access less costly, low-dollar financial services," said Bostic. As an example, he noted that some apps alert people that a payment will trigger an overdraft fee while others provide an option to prepay bills like utilities, allowing consumers to make informed choices about how and when to make purchases or payments.