The Bank of New York Mellon (BNY Mellon) and fintech platform, MoCaFi, have announced a partnership to extend payment options to unbanked and underbanked communities in the U.S.
As part of the deal, BNY Mellon’s Treasury Services business will use MoCaFi’s technology to provide federal, state and local governments, as well as corporate clients, with a digital disbursement payment service that reaches individuals who don’t currently access to basic financial services.
According to a recent Federal Deposit Insurance Corporation survey, an estimated 4.5 percent of U.S. households (approximately 5.9 million) were “unbanked” in 2021, meaning that no one in the household had a checking or savings account at a bank or credit union.
Further, an estimated 14.1 percent of U.S. households (approximately 18.7 million) were “underbanked” in 2021. An underbanked household is one that has a bank account but lacks adequate access to other traditional financial services
In a statement, the firms said there will also be the opportunity to receive basic banking services, including an FDIC-insured account as well as a debit card and credit reporting capabilities through the MoCaFi platform.
Jennifer Barker, CEO of Treasury Services, BNY Mellon said: “The inability to provide digital payments to a significant portion of the U.S. economy has been a major hurdle for both public and private sectors. Through our commitment to innovation, we met this challenge head on and are thrilled to join forces with a fintech doing outstanding, tangible work in our communities.”
Wole Coaxum, CEO and Founder of MoCaFi, added: “Our alliance with BNY Mellon will accelerate our mission to reduce the racial and social wealth gap through increasing pathways to wealth for underserved individuals, especially communities of color. Access to modern banking services is one of the best approaches to making our economy more inclusive, and by working with BNY Mellon we are helping to provide opportunities to as many people as possible.”