The Unbanked

There's an interesting article in Newsweek that I thought to summarize for you loyal readers and it has some insightful tips in it if you are looking to invest in "future" type ideas.

The nutshell is this: Daniel Gross wrote in Newsweek's Oct 25 issue that companies like NetSpend based in Austin TX, are going to to do well- here's why: they are a company that offers pre-paid debit cards that are for the millions of "unbanked" in our country. Ever been to a SuperWalmart and see the long lines that wait in their bank/stamps/ etc line? These are the unbanked- the people who do not have a bank account, or credit (due to personal reasons like being new immigrants or people who just have bad credit and need to have cash to pay some bills). NetSpend's revenues are now at $18.2 million from $700,000 from 2005 to 2009. Green Dot is the company in bed with Walmart. Walmart even pays some of its employees with Green Dot loaded debit cards.

This is the new thing- the pre-paid class. It is growing. Tracfone Wireless has 15 million prepaid subscribers in the US alone and is based out of Mexico's America Movil. Some people see this as a sign of economic regression. However, many, like the author Gross, see this as a positive sign of the U.S.'s business class learning to adapt, which is a sign of progression, rather than a status quo type model. He argues that this may be a new learning tool for us all - learning to buy what you need on a cash only model rather than a credit based market that puts people behind from the beginning of their purchasing habits.
I agree...going prepaid or cash only has alot of benefits- the best being that one learns to buy as needed, not as "wanted."
As he ends his article, he writes "Pay now, buy later."