With over 10 million people in the US having no bank accounts, it is no surprise that the payday loan, check cashing and remittance industries make up a large chunk of the financial services industry. Discover common products, and major reasons why households participate in the AFS industry through the infographic below.

2012 US Alternative Financial Services Usage

Infographic by- The Credit Examiner

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Nearly 10 Million (8.2%)  US Households don’t have bank accounts

28.3% of U.S. households are either unbanked or under banked

Major reasons for not having Bank account

Reasons %age
Not Enough Funds 33%
Don’t need Bank Accounts 21%
Don’t Trust Banks 7.5%
Lack Identification Documents 6.6%
Bank closed their Accounts 6.4%
Bank Account Fees / Min Balance Requirements 5.4%


25% of US households have used at least one form of alternative financial service –

  • Money order
  • Check cashing service
  • Tax refund anticipation loan
  • Pawn shop
  • Rent-to-own service
  • Payday loan

And about 12% of households have used one of these products in the past 30 days

More than 13,000 nonbank financial services companies operate nationwide i.e. almost double as compared to commercial banks in USA

Annual Transaction Volume of US AFS Industry

Alternative Financial Service Transaction Volume ( In Billions)
Buy-Here-Pay-Here (BHPH) Loans $90
Check Cashing $50
Payday Loans $48
Remittances $46
Prepaid Cards $39
Refund Anticipation Loans $26
Money Orders $17
Rent-to-own Transaction $7


Popular AFS Products used by Under Banked Households in last 12 Months

AFS Products %age
Non-Bank Money Order 71.2%
Check Cashing 22.8%
Remittance 14.4%
Pawn Shop 10.2%
Payday Loan 7.9%
Rent-to-Own 5.4%
Refund Anticipation Loan 4.6%


Why Households Prefer AFS Products

Reason %age
More Convenient 51.8%
To Get Money Fast 18.4%
Don’t qualify for Bank loan 13.6%
Don’t have Bank account 10.1%
High Bank Fees 3.4%
Do not Trust Banks 1%
Lack of Identification Documents 0.9%
Other 9.6%


Major Reasons Why Households need Credit from AFS Products

Major Reasons %age
For Basic Living Expenses 43%
Decrease in Income 17%
For House or Car Repairs 11.8%
Special Gifts / Luxuries 4.7%
Family Expenses 2.2%
Health Expenses 2.5%
Legal Expenses 0.6%
Other 13.8%