In rural Alaskan villages, internet banking comes with challenges

NAPASKIAK, Alaska — Megan Williams felt lucky to be carrying $800 in cash when she crossed the river to the nearby town of Bethel.

At the store in his village of Napaskiak in western Alaska, most items are extremely expensive. A five-pound bag of flour costs $13.85, a two-pound bag of rice costs $9.70, and a 2-liter bottle of Tide detergent costs $28.05.

So every few weeks, Williams goes shopping in Bethel, which is just across the Kuskokwim River. Things aren’t cheap there either, as the town of more than 6,000 people isn’t part of the Alaska highway system and everything comes by boat or plane. But prices are better than in the dozens of villages in western Alaska, where supplies take another plane trip to reach the shelves.

During one of Williams’ visits to Bethel, an internet outage rendered cash cards and ATMs unusable.

Williams, who had planned to deposit $800 at her credit union, instead used the money to shop for her family. With a cart full of items, the 25-year-old stood in the lane of the checkout counter counting and recounting her money, while other frustrated shoppers waited. Some other travelers made the trip cashless and returned home empty-handed.

“I had the right amount on hand. It was crazy, though,” Williams, who is Yup’ik, said in an interview at the village’s tribal administration office. The building, like others in the village, is elevated to keep it stable in the area. permafrost thaw. There are no roads in Napaskiak, where the approximately 450 residents walk or ride ATVs on the village boardwalk.

While such outages are rare, Williams’ experience highlights a challenge affecting residents throughout the Yukon-Kuskokwim River Delta: unreliable internet service.

Slow internet speeds affect customers’ ability to access apps from the three depositories that have branches in Bethel: First National Bank Alaska, Alaska USA Federal Credit Union and Wells Fargo.

At First National Bank Alaska, branch managers have back-up plans in place so they can continue to serve customers even if they cannot fully connect to networks.

“We’re going back to the old bank,” said Nili Sundown, manager of the Bethel branch of First National Bank Alaska. “But we never close the bank. … Whatever the challenges, our doors are open.”

Things are starting to change, thanks to federal grants to expand affordable high-speed Internet access.

The Bethel Native Corporation recently won a federal grant of $42 million to build a fiber network in the city and four villages in the region, including Napaskiak. The network will be managed by GCI, the region’s main telecommunications provider, which also received $31 million through a federal grant to provide fiber optic connectivity to a few other communities in the region.

The projects will mark a major upgrade to existing infrastructure and “eliminate the rural-urban digital divide” for the 10 communities that will benefit, GCI President Greg Chapados said in October. These communities all currently operate on a “microwave” system which is much more expensive to maintain than fiber networks.

But for now, GCI customers in Bethel and surrounding villages are paying around $300 a month for download speeds of up to 10 megabits per second, the fastest plan available. In Anchorage, Fairbanks, and a few “hub” towns north of Bethel, download speeds of up to 2,000 megabits per second cost nearly $180 a month.

Despite the challenges, the Internet has revolutionized the way banking operates in the Yukon-Kuskokwim delta, where the vast majority of the population is Yup’ik. Among the most concrete means is the rapid adoption of remote check deposit, allowing village residents to avoid traveling to or sending checks to Bethel.

Traveling to Bethel can be expensive. A six-seater plane ride from Napaskiak to Bethel — which takes less than 10 minutes — costs about $180 and offers the only way to travel between the two places when the river freezes but isn’t yet strong enough to cross.

Chariton Epchook, who lives in Kwethluk village, remembers sending his paychecks to the bank and waiting several days for the money to reach his account. Sometimes it didn’t come soon enough, causing him to be late on his mortgage payments and incur late fees of around $25.

“That was the hardest thing for me,” Epchook said. “Today all I have to do is go online.”

Still, the slow internet means it’s not always easy to use his Alaska USA Federal Credit Union app. Internet is fast early in the morning, but slows down from midday the rest of the day. “It’s a matter of having patience in the afternoon,” Epchook said.

Williams, the Napaskiak resident, said the internet is fastest in her village early in the morning and when the kids are at school.

“When we know everyone is sleeping, that’s when the internet is fast,” Williams said.

Williams’ mother, Sharon Williams, is the tribal administrator and says remote deposit has made her feel more connected than ever to her credit union, Alaska USA. “Mhm, very close. Fingertips,” she said, asking if she felt close to her financial institution.

When she was younger, Williams said getting credit from a bank was difficult. But she recently applied for a loan online from her credit union, Alaska USA, and was quickly approved. “It was as simple as that,” she said.

Banks have come a “long way”, she said.

Sharon Williams recalls watching her mother struggle with credit growing up. Many Yup’ik hunt, fish and gather staples in their diet – such as moose, berries and salmon, although sharp reduced availability of these is causing concern in western Alaska.

Williams’ mother was single, which made it difficult for her family to obtain these sources of food. So the family grew up on more expensive proteins like beef, chicken, and pork. To put food on the table, Williams’ mother sometimes turned to payday loans and pawnshops, paying high interest rates along the way.

“Man, that lady was tough,” Sharon Williams said.

Today, payday loan borrowers in Alaska pay an average annual interest rate of 417%, a rate surpassed by only six other states in the country where payday lenders operate, according to the Pew Charitable Trusts. Nearly 8,400 Alaskans took out more than $20 million in payday loans in 2021, according to data from the state’s Banking and Securities Division. Sixty-eight percent of loans were taken online, rather than in physical locations.

An item that Sharon Williams’ mother brought to a pawn shop comes to mind – the design Williams’ grandmother made for the bottom of a Yup’ik fur parka. “As I got older, I wish I could go get it, get it back,” Williams said.

“It’s really near and dear to the heart,” she said. “To see her give up on something that is so valuable – these days, very valuable – just heartbreaking.”