How profitable is check cashing?
The check-cashing industry is fastly growing and it is becoming more profitable.
The business model of a check-cashing outlet is becoming more attractive for the newer generations, it is a zero-hassle approach and very accessible to consumers that are constantly on the go, and ideal for those that are looking a one-stop solution. These outlets are quickly becoming the go-to scenario for the younger adults, as they can not only cash a check but do a quick shop within the outlet, pay bills, send money and much more.
According to FiSCA, check-cashing establishments cash an estimated $60 billion in checks each year in the United States alone.
These outlets cash checks for a small fee and as mentioned, most of these establishments offer other financial services too. The majority of these consumers are in the lower-income level and maintaining a bank account is nearly impossible because of the minimum balance fees that are required to avoid banking maintenance fees.
As a convenience store, a multi-service business, insurance agency or gas station, it is convenient to offer check-cashing because the market is rapidly growing, some of these reasons are:
- Banking hours
- Banking fees
- Branch closures due to the neighborhoods
- Increase in low-income households
- Paycheck to paycheck living
