New Developments in Payment Systems and Services Affecting Low-Income Consumers: Challenges and Opportunities
The consumer financial services industry has taken advantage of digital technology to transform the way it provides services to consumers using payment systems. After describing this new digital environment, the article describes its impact on lowincome consumers. It examines statutes and regulations that offer limited protection for low-income consumers as well as gaps in those laws. Next, the article discusses three approaches to protecting low-income consumers along with the benefits and limitations of each. One way low-income consumers can be protected is through enforcement of consumer protection laws by administrative agencies. A second is by enacting new statutes and regulations to fill gaps in the law. A third is for the government to establish its own financial services systems. The article then examines three proposals for new financial services systems. These proposals will fail to adequately protect lowincome consumers, however, unless lawmakers require institutions providing these services to include low-income consumers in their decision-making process and to justify their actions based on low-income consumer impact assessments.