A research article from the University of Alabama documents the transformative effect of the COVID-19 pandemic on financial services, with a particular focus on financial technology (FINTECH) firms. In doing so, author Professor Julia Anderson Hill, touches on the use of electronic payments and the role played by Direct Express® in allowing those without a bank account to receive CARES Act Economic Impact Payments (also called “stimulus payments”). The article says:
“Of course, not everyone has a bank account capable of receiving payments. Recipients who normally received government benefits, like Social Security payments, on Direct Express® debit cards received their economic impact payments on the same card. Most of these recipients received payment by early May.”
It goes on to point out, that:
“Other recipients were paid by check or, in more limited situations, by a [different] prepaid debit card. These payments were slower to arrive.”
The article raises some interesting points related to the Direct Express® program, highlighting the state of FINTECH regulation prior to COVID-19, before describing how banks turned to technology to continue to provide services throughout the pandemic. It goes on to describe how bank regulators and other government agencies, including the U.S. Treasury, have relied on technology to deliver payments to people during the pandemic. The article then forecasts that by turning customers, banks, regulators, and government officials toward financial technology, the COVID-19 pandemic will change the legal landscape for the financial technology industry and FINTECH companies.
The article can be read or downloaded at:
COVID-19 and FINTECHs (Consumer Finance Law Quarterly 2021)
SOURCE: University of Alabama