There are 20 million Americans that do not have a bank account today. We call them the unbanked.
Most of these people live in the South. States like Mississippi and Louisiana make up a large percentage.
As financial transactions become more and more digital and we move further away from cash, these people will be at a huge disadvantage.
However, peer-to-peer digital wallets, like Square’s Cash App or PayPal’s Venmo, have been downloaded more than 85 million times since January 1, 2019.
Square’s Cash App dominates in the South, where the rate of the unbanked is highest. The app can be used just like a bank account. Employers can deposit paychecks in there, and consumers can use the app just like they would a debit card for purchases.
So what does this mean for an investor?
Well, as I said, Square (NYSE: SQ) and PayPal (NASDAQ: PYPL) are leading the charge in this area. So these are two companies you should definitely keep on your watch list!
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