Aaron Klein: Slow-Clearing Bank Settlements

Posted by admin on Thursday, October 6, 2016

Aaron Klein Money Quote saying low-income consumers subsidize wealthy and must pay to use their own money. Aaron Klein said:
 

 

“Lower-income Americans, who disproportionately use cash, prepaid cards or debit cards, get little to nothing and are in effect subsidizing the wealthy through the payment system. They also deal with a slow clearing and settlement system that causes additional expensive overdraft fees” — Aaron Klein

 

 

In this quote, Aaron Klein seems to be critiquing how certain payment methods and processes within the current financial system have inequitable effects and disproportionately burden lower-income individuals. Some key points:

• He notes that lower-income Americans rely more on cash, prepaid cards and debit cards compared to higher-income groups.
• Klein argues that this demographic “get little to nothing” in terms of rewards or benefits from the payment system, yet effectively subsidize wealthier customers through fees and merchant prices.
• He also observes that the slower clearing times for checks and daily debit card settlement contribute to more expensive overdraft fees for those with limited funds.

Overall, the quote conveys Klein’s view that traditional payment infrastructure offers few advantages to low-income users while exposing them to greater costs, in effect transferring wealth upwards through an inequitable system that has not kept pace with technological capabilities to benefit all consumers more equally.

Categories: fairness Tagged:aaron kleincashdebitfeesoverdraftpaymentprepaid