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S.C. African American Chamber Advocates Technology To Provide Financial Services
12/14/2016 1:46:07 PM

Stephen Gilchrist
By Barney Blakeney

In this season of accelerated consumer spending among the greatest gifts one can give is that of financial literacy. Stephen Gilchrist, chairman of the South Carolina African American Chamber of Commerce hopes to do just that.

In South Carolina about 55 percent of African American households are unbanked (meaning they don’t have a financial relationship with a banking institution) compared to 21.9% of white households. 

Across the U.S. population, unbanked and underbanked rates are higher among lower-income, less-educated, younger, black and Hispanic, and working-age households. The average financially underserved family spends nearly 10 percent of their income on fees and interest to access their money. Being financially underserved costs time and money lost to the process of cashing checks and making payments, and creates higher vulnerability to crime.
Gilchrist believes that arming the financially underserved with the right tools, like electronic payment technologies, empowers them with greater control over their money.

This technology is just one option that individuals and small businesses can use to pay workers, help employees save the time and money they would otherwise spend cashing their paychecks in predatory lending environments or check cashing arenas that charge upwards of 300 percent to the consumer, he says.

And surprisingly, many small black owned businesses also are unbanked, he said. For small businesses these cards also save employers the cost of cutting checks in addition to tracking business expenses and transactions. Gilchrist says electronic prepayment is the new frontier in global financing.

“Families and businesses understanding the tools that are available to them are critically important,” he said. For example, a recent FDIC survey found that the proportion of households that used a prepaid card in the past 12 months increased from 7.9 percent to 9.8 percent between 2013 and 2015. And the use of prepaid cards was most prevalent among unbanked households with 27.1 percent of households using them in the last year.

Gilchrist is a member of MasterCard Financial Services Company’s Master Your Card Advisory Board. Master Your Card is a community empowerment program sponsored by MasterCard that seeks input, works collaboratively on innovative solutions and provides education about how people can get the most from their money through the smart use of electronic payments. With so many black families trapped in a cycle of low wages and predatory financial institutions, we have to look for ways to do business differently, he said.

In 2015, Master Your Card began a partnership with the South Carolina African American Chamber of Commerce to ensure that members had access to important information about electronic payment technology and other issues that could impact small- and medium-size businesses. “Financial Resource Fairs” were hosted across the country. The workshops provided important information and tips on topics ranging from saving for college, understanding retirement, and building a credit score, to saving money through prepaid cards and working with payroll cards.

MasterCard’s Latino Advisory Board spurred the development of MasterCard’s Six Standards for Prepaid Payroll Cards. These standards are designed to make sure that payroll card programs are a benefit and not a burden for unbanked employees. Master Your Card also has efforts underway to address the problem of financial deserts.

Financial deserts are urban and rural communities where financial resources are scarce, the speed of moving money is slow, and the price of accessing it is high.

When a chronic lack of resources combined with systematic discrimination creates behaviors that push people away from potential solutions and toward practices that cost them precious money, time and financial safety; when families don’t have access to quality education opportunities and individuals who can help them maximize their resources; when institutions fail to treat people with equal respect due to race or class; when families aren't able to build wealth and provide brighter futures for their children because they are trapped in a cycle of low wages and predatory alternative financial services; and when there are no social or financial safety nets people need alternative opportunities, Gilchrist said. The S.C. African American Chamber of Commerce hopes to help them find those alternative opportunities.

He cited the now common use of EBT cards that revolutionized electronic food purchases and noted some 50 percent of EBT card users also are unbanked. Technology is transforming the financial world, Gilchrist said. It’s important for underserved communities to become engaged so they are not taken advantage of by predatory financial institutions, he said.

For more information, go to the S.C. African American Chamber of Commerce website at or call 803) 661-2977.

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