Will The Loss Of Interchange Fees Cause Americans To Be Unbanked?
Remember that free checking account? Well it may become a thing of the past as thousands of Americans join the ranks of the unbanked. Why? Well banks used to offer these free checking accounts because they could charge an interchange fee to retailers who take debit cards. Customers using this convenience could draw from their free checking account and they never knew they were causing the retailer to pay a fee to the bank. Now congress has limited these fees and banks are looking to make up for this loss of revenue. Instead of charging the retailer they now will charge monthly fees doing away with free checking accounts. The impact is that those with small amounts in their checking accounts will not stand for a $5 or $10 monthly charge and will thus close their account and become one of the many unbanked who use unbank loans such as payday loans and carry only cash and pre-paid debit cards. Who will benefit from this new population of unbanked consumers? Likley places like Unbank and Payday America who offer check cashing services and small loans to those without bank accounts.
posted by beer234 @ 7:26 AM
<< Home