At
PayPal, we believe everyone should have access to affordable, convenient and secure financial services. Since our founding, we’ve embarked on a mission to give consumers the flexibility and choice to pay how and where they want.
However, there are still billions of people globally who are faced with inconvenient, time-consuming and expensive systems to complete simple tasks like cashing a paycheck or sending money to a loved one. In the U.S. alone, more than 30 million Americans are financially underserved and
spend 9.5% of their income on interest and fees for alternative financial services. To put it into context, that is about the same portion of income that the average American household spends on food in one year.
[1] In an era of mobile technology and advanced software platforms, we can do more to unlock the potential of financial technology to improve the financial health of billions of people across the globe.
Today, we are taking further steps to help meet that promise. In collaboration with some of the leading financial institutions in the U.S., in the coming weeks PayPal is introducing new products targeted at unbanked U.S. consumers in order to give access to financial services that are less expensive, less time-consuming and more convenient:
- Expand the ways you use PayPal: The PayPal Cash Mastercard® is free to sign-up for and there are no monthly fees and no minimum balance requirement. The card will let users access the money in their PayPal account to shop online or in stores anywhere Mastercard is accepted or users can withdraw cash from ATMs worldwide, including over 25,000 free MoneyPass® ATMs nationwide.
- More ways to add money to your PayPal account: People who don’t have a bank account can choose to directly deposit their paycheck into their PayPal account for free, so customers can enjoy the benefits of spending their PayPal balance anywhere. Customers who enroll in these features will be eligible to receive FDIC pass-through Insurance on the funds held in their PayPal account, and there is no minimum balance required. Eighty-five percent of today’s transactions are still happening in cash and checks. One service we’ve had for some time lets consumers load cash into their PayPal balance at over 20,000 CVS, 7-Eleven and Rite Aid retail locations in the U.S. to do activities like shop or pay their bills online. Additionally, people can now deposit checks via a mobile device more affordably and conveniently.
Why are we introducing these services? While technology innovation has unlocked new and powerful financial products and services for many consumers around the globe, we have an opportunity to do more to enable underserved consumers to have more control over their financial health. According to the Center for Financial Services Innovation (CFSI),
financially underserved Americans spent $141 billion in 2015 alone to manage their financial lives. We believe mobile technology holds the key to solving this challenge for our customers. When financial services and products are reimagined for the mobile-first customer of today, these services have the potential to become less expensive, more accessible, and much easier to use. We’re excited to take on this challenge, because it speaks to exactly what we do at PayPal: we develop and deliver financial services and products in a mobile-first way – in a way that serves both merchants as well as consumers – and in a way that only PayPal can, due to our partnerships across the ecosystem.
These new offerings complement our existing products aimed at making it easier for our customers to move and manage their money, including the ability to pay with PayPal at millions of merchants, gain access to manageable credit, conveniently and securely make purchases through PayPal One Touch, and more. Additionally, we’re serving these consumers through
PayPal’s acquisition and integration of Xoom, where consumers can deposit money directly into their bank accounts, to send cash, pay bills and reload prepaid mobile phones to loved ones in more than 60 countries.
The evolving needs of today’s consumer are vast and varied, and we will continue to work to address them. Over the coming months and years, we look forward to introducing a broad set of products, services and partnerships that further democratize financial services for all.
[1] U.S. Postal Service, Office of Inspector General. (2014). Providing non-bank financial services for the underserved (RARC-WP-14-007). http://www.uspsoig.gov/sites/default/ les/ document-library- les/2014/rarc-wp-14-007.pdf