Defining Households That Are Underserved in Digital Payment Services

Greene, Claire; Hayashi, Fumiko; Lloro, Alicia; Shy, Oz; Stavins, Joanna; Toh, Ying Lei

doi:10.18651/RWP2024-09

Working Paper

Defining Households That Are Underserved in Digital Payment Services

Abstract: U.S. 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—are not suitable because they 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.

Keywords: payment systems; digital currencies; fintech;

JEL Classification: D12; D18; G21; G23;

https://doi.org/10.18651/RWP2024-09