More and more of us today use digital tools to spend, save, manage, and invest our money. Eight in ten Americans used a fintech product in 2022, and 93 percent of us say we benefit from these services, according to The Harris Poll. Fintech products save time and money and make financial services work for everyone, everywhere.
This National Consumer Protection Week, learn how popular financial technology companies embed consumer protections into their products, helping protect our money and financial information.
- Safeguarding Privacy and Consumer Financial Data. Proper use of consumer financial data is a foundational principle for financial technology companies. Consumers increasingly want more control over how their information is being used, with 76 percent revealing that they have more trust in financial companies that clearly state their privacy practices, according to The Harris Poll. FTA members are leading the way in calling for a higher bar. Our recent privacy principles highlight our commitments: FTA members believe in plain language and transparency, the ability for a consumer to opt-out, the right to delete, and the consumer’s ability to control their personal financial data.
- Staying Safe Online and Combatting Fraud: Responsible fintech companies take fraud seriously and invest consistently in keeping platforms safe. FTA members engage in ongoing education on their apps and websites to help consumers identify and avoid scams. They embed enhanced layers of fraud prevention measures, including strong authentication and authorization techniques, robust partnerships with banks and processors, and data-driven measures to prevent fraud.
- Zero-to-Low Interest and No Hidden Fees with Buy Now Pay Later. Buy Now Pay Later (BNPL) lets consumers pay for small-dollar purchases in four installments with zero to low interest. This allows consumers responsible access to valued products and services. BNPL companies protect consumers from accumulating debt by pausing access to the product if they miss a payment. BNPL companies rely on merchant partnerships, not consumer fees, for revenue, so there are no hidden costs and no compounding interest. As a result, people who use BNPL like and trust the service, according to Morning Consult, and turn to it to manage their cash flow responsibly.
- Earned Wage Access: A Critical Alternative to High-Cost Lending. Earned Wage Access (EWA) allows people access to their already earned wages before their next scheduled paycheck. This alternative helps them smooth out cash flow between payroll cycles that can be as infrequent as monthly. FTA’s EWA providers do not charge interest, giving people a safe alternative to manage their cash flow and weather short-term financial shocks such as a medical bill or car emergency. Without this option, nearly half of consumers would struggle to pay bills on time, and many Americans would be forced to turn to high-cost payday lenders or face overdraft fees, according to FTI Consulting.
Want to learn more about how financial technology companies protect consumers and offer flexible, lower-cost financial products? Read FTA’s Just the Facts on Buy Now Pay Later and Earned Wage Access, and check out our Privacy Principles for the Future of Finance.