Underbanked consumers, those who use few traditional banking services, rely heavily on cash as a form of payment. According to a March 2009 report from industry analyst firm Javelin Strategy & Research, credit card spending continues to decline, with 20 percent fewer consumers indicating recent credit card usage in 2008 compared to 2007. In fact, only 64 percent of consumers indicated they used a credit card in the month preceding the survey, compared to 87 percent of consumers in 2007 â a 23 percentage point decline. These findings indicate that many consumers are seeking to curtail credit card usage in favor of other payment types, including cash.
âAs the economy struggles, consumers struggle to manage their finances. Javelinâs research revealed that more individuals are having difficulty putting funds into savings, and more individuals are having difficulty paying off credit card debt,â said James Van Dyke, president and founder of Javelin Strategy & Research. âUnderbanked consumers often hold onto their cash up to the last minute before making purchases or paying bills, making the walk-in bill payment channel an important bill payment option.â
âIn-person financial services provide a way for consumers to actively manage their financial lives, which is particularly important in the current economic climate,â said Paul Harrison, senior vice president and general manager, Walk-In Solutions, Fiserv. âThe CheckFreePay NextDay bill payment service allows consumers to hold onto their money longer, and is much less expensive than typical âemergencyâ payment products.â