Request for Information on Mobile Payments

The Consumer Financial Protection Bureau (“CFPB”) released a request for information (“RFI”) concerning the use of mobile financial services, specifically among unbanked and underbanked consumers. In the RFI, the CFPB expresses its interest in exploring the ways mobile devices can give access to consumers who do not have easy means to obtain or use current financial products and services. In addition the CFPB wants to know how mobile devices can offer everyone opportunities for real-time money management.

CFPB director Richard Corday stated, “Ensuring access to financial products and services is a key focus for us at the Consumer Bureau. We have learned from the FDIC’s research into the difficulties experienced by those who are either unbanked or under-banked. Tens of millions of Americans fall into these two categories. They face costly challenges to complete day-to-day transactions that those in the mainstream financial system take for granted. Our inquiry here will focus on an even broader category of consumers who are ‘underserved.’ They are hard-working people living from paycheck to paycheck and waging a constant struggle to make ends meet. They often are younger. And they may also face particular accessibility issues – such as consumers who are disabled or who live in certain areas.”

He futher stated, “A recent FDIC study found that the ‘anytime, anyplace’ nature of mobile financial services offers the potential to help more people gain easier access to the banking system and grow their financial capability. Mobile phones are quite prevalent among many of these consumers, who may use these devices in lieu of computers. For example, in households earning less than $25,000 a year, 74 percent of adults have a mobile phone of some type and 44 percent have a smartphone. Mobile financial services can help provide access to a myriad of products and services that these consumers may not be able to access due to location or other barriers such as cost. The cost issue is important because mobile has the potential to be significantly cheaper than traditional banking. One industry report calculated that the average cost of an in-branch transaction was $4.25, whereas the average cost of a mobile transaction was just ten cents. These are significant cost savings, much of which can and should be passed on to consumers.”

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