The COVID-19 global pandemic accelerated, exacerbated, and highlighted a range of economic trends, with none more-clear than the need for greater broadband access to solve financial inclusion challenges.
The Federal Deposit Insurance Corporation’s report on “Household Use of Banking and Financial Services” was completed in October 2020 and showed that 66 million American adults (more than one-in-five) are unbanked or underbanked. That means the 5.4 percent of Americans living in an unbanked household have no checking or savings account or access to credit cards. And another 16 percent qualified as underbanked may own a bank account but still utilize other financial services like check-cashing loans, which come with high fees.
Efforts to close this gap, including rapid dissemination of COVID-19 stimulus funds, are stymied by limited or no access to Internet services. This digital divide causes more fundamental problems for the unbanked and underbanked than just the speed at which they receive stimulus funds. Those without access to the Internet or the costly tools to get online (smartphones, computers, tablets, etc.) also struggle to deposit paychecks, pay bills, apply for loans or credit, or receive unemployment benefits even if they did have a bank account.
The payments processing and fintech industry are investing heavily in R&D to put financial services in the hands of every American. Yet these innovations towards greater financial inclusion will deliver slower results without meaningful government intervention to make internet infrastructure far more ubiquitous and affordable.
American Transaction Processor Coalition (ATPC) member companies agree with the World Bank that broadband access is “a basic necessity for economic and human development.” And we support White House and Congressional prioritization of bridging the digital divide for the more than 157 million Americans who don’t use the Internet at broadband speeds. (source: Microsoft).
The ATPC is encouraged that President Biden’s American Jobs Plan prioritizes historic investments in broadband infrastructure deployment, including $100 billion to reach 100 percent coverage. The ATPC looks forward to working with Vice President Harris, members of the Administration and Congressional leaders on this important initiative. While the American Rescue Plan Act of 2021 included emergency funding for broadband projects, the ATPC believes that more investment is needed and supports the introduction of S.745 / H.R. 1783, the Accessible, Affordable Internet for All Act in the 117th Congress. Bridging the digital divide and promoting financial inclusion is an important mission of the ATPC