NEW YORK (MainStreet) — The actual number of Americans who are "unbanked" (meaning they have no relationship with a financial institution) or who are "underbanked" (who have a limited relationship with a financial institution) is hard to pin down.

Studies by the Federal Deposit Insurance Corp., KPMG and the University of Virginia Darden School of Business estimate that there are between 68 million and 88 million unbanked and underbanked Americans.

The problem is something of an epidemic, says TD Bank, in its recently released Checking Experience Index, and common enough that unbanked and underbanked Americans are finding novel approaches to personal money management outside of the traditional banking structure.

Primarily, 71% of the unbanked prefer to use cash to make day-to-day purchases (compared with 20% of the general population), while 23% of the unbanked turn to prepaid, reloadable credit cards to move money around instead of using checks, debit cards or credit cards. Only 22% of that group use prepaid cards for online purchases, meaning they're mainly used at the point of purchase — a mall, grocery store, service center or other retail outlet.

The report says prepaid cards are used widely for online purchases in the general, "banked" population, who see them as a good convenience for shopping via the Internet or paying bills online. But the unbanked see prepaid cards as a necessity, TD Bank says, an indispensable form of payment given they don't usually qualify for credit cards and (for whatever reason) don't use banks.

"People can buy prepaid cards anywhere now, so the convenience is leading to adoption. In addition, there are no hurdles, so anyone can buy them," says Ryan Bailey, executive vice president at TD Bank.

The report notes that check cashing services, money transfer agents and payday loan providers are also popular among the unbanked and underbanked, although "one in five consumers with a bank account are [also] using alternative banking products, which could add needless cost to their monthly budget," Bailey says. "Consumers who are using these types of services should have a conversation with a banker to learn about less expensive financial products that can meet their everyday financial needs."

Carl Carande, national account leader of KPMG LLP's Banking and Finance practice, called it in 2011, stressing that those conversations would be good for banks as well as consumers:

As banks transform their business models to address a new marketplace, they need to examine the potential of the underserved market as new revenue streams are necessary due to increasing compliance costs and various fees coming under pressure as a result of regulatory reform. In the current environment, we see heavy competition among banks chasing customers with high credit scores, with decreasing margins, leaving the underserved market for those willing to invest in it.

— By Brian O'Connell for MainStreet