Means of Payment, the Unbanked, and EFT '99

22 Pages Posted: 26 Nov 2012

See all articles by Edward S. Prescott

Edward S. Prescott

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Daniel Tatar

Independent

Date Written: 1999

Abstract

Surprisingly, 15 percent of U.S. households, most with low incomes, do not own a checking account. How do these people make and receive payments? Why don’t they own checking accounts? These questions are answered using qualitative evidence from two focus group interviews plus quantitative evidence from several surveys. The evidence shows that there are low-cost alternatives to account ownership. For example, checks are often cashed for free at banks or grocery stores. These findings are especially relevant to the government’s efforts to make most federal payments by electronic means (EFT ’99) since the chief obstacle to implementing this mandate is the large number of government beneficiaries who do not own depository accounts.

Suggested Citation

Prescott, Edward (Ned) Simpson and Tatar, Daniel, Means of Payment, the Unbanked, and EFT '99 (1999). FRB Richmond Economic Quarterly, vol. 85, no. 4, Fall 1999, pp. 49-70. Available at SSRN: https://ssrn.com/abstract=2129870

Edward (Ned) Simpson Prescott (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

P.O. Box 6387
Cleveland, OH 44101
United States

HOME PAGE: http://https://www.clevelandfed.org/people-search?pid=f8ca941e-4b51-41f6-95f8-c87f1d3806e5

Daniel Tatar

Independent

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