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cost) checking account that financial institutions were en- are much higher among the underbanked: 91.4 percent
couraged to offer customers of limited means. The initia- have mobiles; 75.5 percent have smartphones.
tive was not a great success.
The FDIC's survey also offers insights on how consumers
Payroll cards were being offered long before GPR became with bank accounts interact with their financial institu-
an acronym for a type of prepaid debit card. In the 1990s, tions. That data also points to a growing preference for
many large companies turned to payroll cards as an alter- mobile access to banks. "The estimates by banking sta-
native to direct deposit. That effort seems to be working. tus show that use of mobile banking grew substantially
Aite Group LLC reported payroll cards reached a tipping among both underbanked and fully banked households,"
point in 2015: at 8.1 million, the number of employees paid the report stated. Among underbanked households 12.6
using payroll cards exceeded the number receiving paper percent told the FDIC that mobile was their primary
paychecks (7.0 million). means of accessing accounts.

And as recently as June 2011, Time magazine published Companies like Ingo Money Inc. are tapping into this
an article asking "Will Banks Target the Unbanked Next?" market demand. Ingo has built a consumer-direct digital
Some banks have, Alabama-based Regions Bank and First check-cashing network that is being used by banks and
Tennessee Bank among them. But most bankers believe nonbanks to support fee-based expedited funds availabil-
they can't generate sufficient revenues to support low- ity options. Ingo has agreements with all the major card
cost accounts. Some banks that tried by migrating these brands to support these fee-based services, and with sev-
accountholders to lower-cost electronic channels (primar- eral prepaid companies. In 2015, it struck an agreement
ily ATMs) received bad press. I believe that's unlikely now with NetSpend Corp. (the TSYS-owned prepaid card com-
that a majority of Americans are glued to their mobiles pany) to provide check-to-prepaid card loads through its
? especially millennials, who are sometimes referred to as issuing partners.
the mobile-first generation.
Patti Murphy is Senior Editor of The Green Sheet and President of
The FDIC found 69 percent of the unbanked adults have ProScribes Inc. She is also the founder of InsideMicrofinance.com. Email
mobiles; 43 percent have smartphones. The percentages her at patti@greensheet.com.