Mobile Banking: The Answer for the Unbanked in America?

32 Pages Posted: 8 Apr 2016

Date Written: 2015


In the U.S., the poor often lack access to mainstream banking services. Instead, they rely on expensive, poorly regulated alternatives like check cashers, payday lenders, pawn shops, and auto title lenders. These financial products jeopardize poor people’s financial and physical security.

Both government officials and private enterprise have attempted to craft solutions to the banking access problem by pushing adoption of traditional banking products, but so far these attempts have fallen short. This Article asserts that mobile banking may be a transformative technology that can significantly increase financial inclusion in the United States.

The Article discusses current statistics and demographics of mobile phone ownership in the United States, the success of overseas mobile banking programs aimed at helping the poor, and the current prepaid card industry in the United States. The Article draws lessons from these case studies and asserts that bringing the unbanked into the regulated banking system is worth private investment in mobile banking products and platforms. (The Article also argues that if private entities do not find it fiscally feasible to pursue this market, public funds can and should be expended.) The Article recommends specific account features that would benefit the currently unbanked, such as having an option for transaction accounts in addition to savings accounts, providing mobile applications that provide financial education, and allowing for users to open accounts over their mobile phones. It also proposes that customer identification procedure can be relaxed for small-balance accounts designed specifically to increase financial inclusion.

Keywords: financial inclusion, mobile banking, customer identification procedures, transaction accounts, financial education

JEL Classification: KOO, K10, K19, K20, K29, K39, A10, E50, G00

Suggested Citation

Christopher, Catherine Martin, Mobile Banking: The Answer for the Unbanked in America? (2015). Catholic University Law Review, Vol. 65, No. 2, 2015, Available at SSRN:

Catherine Martin Christopher (Contact Author)

Texas Tech University School of Law ( email )

1802 Hartford
Lubbock, TX 79409
United States

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