You speaking of rational responses. You likely refer to the rational expectations hypothesis in economics. The default assumption is of course that everyone makes rational decisions, including the poor.
Since they are making decisions that you don't think are rational ("it's probably rare for the optimal solution ..."), you conclude that the reason is that the poor people are less well-informed.
This makes sense, so long as everyone has equal access to the same services, or at least access to the same services you do, and that there is competition among those services.
However, as the author points out, the poor areas are under-served in terms of banking choices, and banks use "private databases like ChexSystems that currently keep more than a million low income Americans from being able to open accounts."
Because of the obvious market inequality, you cannot conclude as you did that the people who use RiteCheck are making either an irrational decision or un-informed decisions.
It's not the rational response at all. The rational response is to get a bank account like your wallet. One that ASKS YOU explicitly for permission before paying out money to someone else.
A bank account is not that, at all. A credit card is closer to that (because of chargebacks). Prepaid credit cards, and getting a new one every month (carrying over the balance, and because of the number changes, it's very hard to charge you things you don't want to pay for), are better still. Cash is best.
You want to improve the situation of 90% of America's poor ? Find a way to convert a check into a prepaid credit card (with balance transfers from a previous prepair card, ideally), for as low a fee as possible. Make that option available in poor neighbourhoods. When you have that, offer a bank account to them as well, NOT linked to the credit card, fee-free (no-one will care if it's also interest free) that they can save money into.
The people we are talking about use cash, but need a service to turn checks into cash.
You propose what you think should be a better solution. This history so far shows that your solution is not clearly better. Just this month "The Consumer Financial Protection Bureau issued a bulletin warning employers against using only so-called payroll cards to pay workers." ... "Complaints received included fees for withdrawing cash and checking card balances. Critics say payroll cards with high fees mean that some workers are essentially making less than minimum wage." -- http://www.usatoday.com/story/money/business/2013/09/13/agen...
Yes, there can be a time where that's a better solution than a check.
However, we are not yet at that time, so it's not a rational choice NOW.
Since they are making decisions that you don't think are rational ("it's probably rare for the optimal solution ..."), you conclude that the reason is that the poor people are less well-informed.
This makes sense, so long as everyone has equal access to the same services, or at least access to the same services you do, and that there is competition among those services.
However, as the author points out, the poor areas are under-served in terms of banking choices, and banks use "private databases like ChexSystems that currently keep more than a million low income Americans from being able to open accounts."
Because of the obvious market inequality, you cannot conclude as you did that the people who use RiteCheck are making either an irrational decision or un-informed decisions.