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Defining Households That Are Underserved in Digital Payment Services

Author

Listed:
  • Claire Greene
  • Fumiko Hayashi
  • Alicia Lloro
  • Oz Shy
  • Joanna Stavins
  • Ying Lei Toh

Abstract

US households that lack digital means of making and receiving payments cannot participate fully in an increasingly digitized economy. Assessing the scope of this problem and addressing it requires a definition of households that are underserved in digital payments. Traditional definitions of households underserved in the banking system—those that are unbanked and those that are underbanked—do not account for the ownership of nonbank transaction accounts that can be used to make and receive digital payments. In this paper, we define households underserved in digital payments by considering four key elements—access, use, safety, and affordability—and discuss how researchers may assess these elements to quantify the share of households underserved in digital payments.

Suggested Citation

  • Claire Greene & Fumiko Hayashi & Alicia Lloro & Oz Shy & Joanna Stavins & Ying Lei Toh, 2024. "Defining Households That Are Underserved in Digital Payment Services," Working Papers 24-10, Federal Reserve Bank of Boston.
    • Handle: RePEc:fip:fedbwp:98803
    DOI: 10.29412/res.wp.2024.10
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    References listed on IDEAS

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    1. S M A Moin & James F. Devlin & Sally McKechnie, 2017. "Trust in financial services: the influence of demographics and dispositional characteristics," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 22(2), pages 64-76, June.
    2. Chakravarty, Satya R. & Pal, Rupayan, 2013. "Financial inclusion in India: An axiomatic approach," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 813-837.
    3. Thereza Balliester Reis, 2021. "What is financial inclusion? A critical review," Working Papers 246, Department of Economics, SOAS University of London, UK.
    4. Ying Lei Toh, 2021. "When Paying Bills, Low-Income Consumers Incur Higher Costs," Payments System Research Briefing, Federal Reserve Bank of Kansas City, issue November , pages 1-7, November.
    5. Felt, Marie-Hélène & Hayashi, Fumiko & Stavins, Joanna & Welte, Angelika, 2023. "Regressive effects of payment card pricing and merchant cost pass-through in the United States and Canada," Journal of Banking & Finance, Elsevier, vol. 154(C).
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    8. repec:wbk:wbpubs:16238 is not listed on IDEAS
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    Cited by:

    1. Elena Falcettoni & Vegard Nygaard, 2025. "Refining the Definition of the Unbanked," Finance and Economics Discussion Series 2025-033, Board of Governors of the Federal Reserve System (U.S.).
    2. Hayashi, Fumiko & Routh, Aditi, 2025. "Financial literacy, risk tolerance, and cryptocurrency ownership in the United States," Journal of Behavioral and Experimental Finance, Elsevier, vol. 46(C).

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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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