Unbanked

Unbanked people typically rely on cash for most transactions and may use alternative services, such as cheque-cashing outlets, money transfer services, prepaid cards or informal lenders, which often charge higher fees.

According to the World Bank, the number of adults worldwide without an account has fallen significantly in recent years, helped by mobile money and digital payments, but well over a billion adults remain unbanked. Most live in developing economies, although a smaller share of people in wealthy countries are also unbanked.

People may be unbanked for many reasons, including having too little money to make an account worthwhile, lacking identity documents, distrust of banks, high fees, living far from bank branches or having had problems with banks in the past.

For example, a worker paid in cash might keep savings at home and pay fees to send money to family, without the safety and lower costs a bank account could provide.

A related term, underbanked, describes people who have a bank account but still rely on alternative and often more expensive financial services for some of their needs, such as payday loans or cheque cashing.