NYC Pushing For A ‘Public Venmo’ Money Transfer System

Written by CultureBanx
Venmo
A free Venmo-like money transfer network may be coming to NYC’s underserved communities. The unbanked are disproportionately African American and vulnerable to extra fees. This Oct. 8, 2019, photo shows the Apple Pay app on an iPhone in New York. (AP Photo/Jenny Kane)
  • New York City announced a ‘Public Venmo’ bill to create a free peer-to-peer money transfer network
  • In New York City 12% or 360,000 households were unbanked in 2015

A free peer-to-peer money transfer network like Venmo may be coming to New York City if a new bill passes. The basic mechanism would be through dispersal of state-generated funds directly to privately-held digital wallets of New York State residents, more efficiently enabling them to borrow an anticipated amount of money in tax credits, transferring the value to a third party in exchange for goods or services. Can a ‘Public Venmo’ system actually help the financial solvency of underserved communities?

Why This Matters: The initiative, called the Inclusive Value Ledger Plan (IVL), aims to improve state-administered savings, monetization and production for users with the help of newly created digital technology. In New York City, one of the nation’s biggest financial hubs, 12%, or 360,000 households, were unbanked in 2015. This national pattern of disparity in unbanked rates rises sharply in majority-minority neighborhoods such as the Bronx, where the unbanked rate is twice the citywide average. Having a publicly administered option for such consumers would help save billions every year and help generate a new economic engine through technological and financial spaces.

According to businessman and consumer advocate Bill Bartmann, the founder and CEO of CFS2 “68 million financially underserved Americans spend an average of $108 per month per person on financial services.” Such consumers, which disproportionately are composed of African Americans, are especially vulnerable to extra fees and restrictions placed on traditional accounts. 

Situational Awareness: Currently, there are few trusted Black-owned financial institutions: most recent FDIC data show that there are just 23 Black-owned banks in the U.S., down from the 2007 figure of 44. The 2017 social media generated movement of  #BuyBlack was started by well-known figures in the Black community and continues to this day, but suffers from a lack of implementation on a larger scale, as well as the availability of affordable options for lower-income users. The creation of the public Venmo network would aid underbanked communities to better manage and disseminate their purchasing power into their local economies. 

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This article was written by Lyric Prince and published by CultureBanx. It is reposted here with permission. Read the original.