By : Andy Brown
June 27, 2017 08:00 AM
For many financial institutions, improving their offerings to deliver better services to the unbanked and underbanked remains a top priority.
Around two billion people worldwide currently fall into this category - and it is not just in emerging economies where banking infrastructure is less developed where there is potential for growth. In the US, for example, it's estimated around 24.5 million households are classed as underbanked - defined as having a checking or savings account, but also obtaining financial products and services from outside of the traditional banking system.
It is these people that PayPal is aiming to reach with its recent purchase of TIO Networks, a payment processing firm that specializes in providing bill payment services to underbanked citizens in North America.
Offering more options for bill payments
The company serves 14 million consumer bill pay accounts, and in 2016 its network of point-of-sale, kiosks, web and mobile channels processed some 60 million transactions. It works with more than 10,000 billers including some of the US' largest telecoms and
Dan Schulman, president and chief executive of PayPal, explained this network allows financially underserved citizens easier and faster ways to pay their bills, which helps them avoid issues such as missing payment deadlines, service interruptions
"Bill payment is ripe for innovation, and helping people pay their bills more conveniently is a significant step towards achieving PayPal's goal of providing essential financial services for our customers," he continued. "It is fully aligned with our mission to expand access and participation in the financial system for those who have been underserved."
The impact on the payments industry
For PayPal, the move may be seen as a key part of its efforts to expand its range of services and position itself as a key player in driving innovation for the underbanked.
In a recent interview highlighted by PYMNTS.com,
Therefore, PayPal clearly sees an opportunity to tap into this in order to help make payments easier and more convenient for the estimated two billion people worldwide who do not have access to adequate banking capabilities.
By combining TIO's platform and user base with its digital and mobile payment options, PayPal may look to become
The move into this area could