C-Store Check Cashing

October 28, 2016

C-store check cashing relies on the convenience store industry. So, before we dive into the check cashing, we will examine the industry itself. The Association for Convenience and Fuel Retailing (NACS) reports that in the U.S. there are 154,000-plus convenience stores that account for $575 billion in sales. 2015 saw 0.9% growth over 2014, and convenience store chains continue to open new locations across the country.

The Convenience Store Industry

The convenience store industry fills a niche in consumer needs. Consumers choose to shop at convenience stores for a variety of reasons:

  1. Convenient locations
  2. Extended operating hours
  3. One-stop shopping
  4. Fast financial transactions
  5. Grab-and-go food service

The NACS reports that 69% of c-stores say their in-store sales in the first nine months of 2016 are higher than this same period for 2015. This indicates optimism within the industry and a positive trend in sales.
In the United States, the younger population is flocking to cities for convenience, amenities, and opportunity. Neighborhoods and communities are increasingly important to Millennials. This demand for community and cities is driving growth in the grocery store, gas station, and convenience store markets.
The industry publication, C-Store Decisions, implores convenience store owners to rise and meet this growing demand. Erik Riqik, a writer for C-Store Decisions, asserts that the growing population and increasing diversity are a huge advantage for c-store owners. Additional population demographics driving demand are an aging population and uptick in people living alone.
C-Store Decision remarks, “some 46 million people are 65+ today and that is growing toward 74 million or 19% of the population. The makeup of households is also evolving, with an increasing number of people living alone, which redefines mealtime.” Older members of the population and those living alone have one thing in common: they don’t spend as much time cooking meals for themselves. This leads them to look to their community for fast and convenient dining options.
The convenience store industry capitalizes on these demographic shifts by becoming the one-stop-shop for their neighborhoods. As they grow, convenience store owners add more and more services to their retail outlets to keep their customers satisfied and coming back for more.

C-Store Check Cashing

Convenience store customers are willing to pay slightly higher retail prices to be able to buy toothpaste and bread at 1am. In this way, convenience store check cashing is a fee-based model for bringing financial services to consumers in a convenient manner. Customers who do not have access to traditional financial institutions and those who simply choose convenience are willing to pay the fee to cash their check at a convenience store.
Once these consumers are at the convenience store, they take advantage of other convenient financial services like bill pay, payday lending, ATM services, tax preparation, and even state lottery offerings. Beyond financial transactions, convenience store check cashing customers are likely to conduct their grocery and household shopping at the same place they access financial services.
Banks and traditional financial institutions are quick to wag their fingers at convenience stores and check cashers for their fee model. These institutions, however, have fueled the growth experienced by the check cashing industry over the past 7 years. As banks raise checking account minimums and impose account maintenance fees, check cashing fees become less and less of a “deal breaker” for consumers. In fact, the fees are far outweighed by the convenience and accessibility of convenience store check cashing services.
On top of this, banks are perceived as unfriendly by those who do not speak English as their first language. Convenience stores and other retail check cashers provide friendly check cashing services in their communities. Overall, accessibility and convenience are driving growth in the convenience store check cashing industry.

Obstacles Convenience Stores Face

Despite growth and optimism within the convenience store industry, c-store owners face a variety of obstacles. The issues facing the convenience store industry and convenience store check cashing include:

  1. Competition from Amazon and big box stores
  2. Softening tobacco market
  3. Safety concerns
  4. Negative perception

Convenience store check cashers face additional hurdles, like access to reliable bank accounts and financial services support. For c-store check cashers, a reliable bank account can make or break their check cashing business. As a result of industry wide indiscriminate derisking, big banks are closing their check cashing and MSB accounts.
NCC interviews ten of its clients and they all expressed concerns over reliable banking and compliance. NCC client, Eric Bell, owns and operates The Check Cashers Inc. in Philadelphia, PA. Since 1990, he has served his community with convenient check cashing services. He told NCC that he was shocked when his long standing banking relationship was terminated by his bank of 19 years.
Since his bank deemed his business “too risky,” Eric was left with out a bank, scrambling to keep his business up and running. Finding NCC was a big relief for Eric’s business and allowed him to keep operating. As the check cashing market is challenged by increased competition, Eric has his eyes set on expanding his market share.

Competition in the C-Store Check Cashing Market

C-store check cashers are facing down pressure that extends beyond access to banking. As the industry experiences growth and success in years after 2009, other convenience-style stores are looking for ways to get in the game. Walmart and 7-Eleven are two big names disrupting the convenience store industry.
Walmart is an outsider shaking up the convenience store check cashing industry. In 2016, Walmart began testing online ordering with curbside store pick-up and expanded their check cashing offerings. Then Walmart rolled out “Walmart Express,” their stand alone gas and convenient store prototype. In October 2016, the company announced plans to slow store openings as the company focuses its efforts on online sales. Their Walmart To-Go concept is still slated to open this year. It is not clear what this shift means for convenience stores, as it is unlikely Walmart will abandon its attempts to get a larger slice of the market.
7-Eleven is a convenience store industry insider, partnered witch Vcom to bring check cashing kiosks to many of its American locations. These kiosks offer check cashing, money order, and other nontraditional financial services. As larger companies like 7-Eleven continue to innovate, it drives the rest of the convenience store industry to keep up with the changes.
The Wall Street Journal also reports that Amazon is moving into the convenience store market with new brick and mortar stores selling perishables and essentials that consumers can pick up and take home. The small stores will also offer curbside pick-up for Amazon customers who prefer to order online and then swing by for their completed order.
NACS notes that convenience stores that bundle necessary services, like gas or financial transactions, help their consumers save time. This is crucial because saving time is one of the greatest motivators for consumers today. In fact, bundled services are the key differentiator that will help convenience stores shrug off the competition from Amazon.
Since nearly 27% of Americans are unbanked or underbanked, according to an FDIC report, the check cashing industry shows no sign of slowing down. Convenience stores can serve their communities and stay ahead of the competition by adding retail check cashing services to their locations.

NCC Helps C-Store Check Cashers

NCC provides real MSB bank accounts so that you can focus on increasing your market share and honing your services, not on holding down a bank. With NCC on your side, you have the time and resources to devote to expanding your food service, increasing your retail offerings, improving safety, and getting ahead of your competitors.
Specifically, NCC provides redundant banking partners for reliable bank accounts, advanced POS technology, and a team of check cashing experts ready to help you 24/7. Extra benefits include fast rotation of your working capital, the ability to offer a suite of retail check cashing services through NCC’s banking network, and compliance experts that help you prevent fraud.
What are you waiting for? Call us or fill out a form today to start your convenience store check cashing bank account application. We look forward to speaking with you about your business and your specific needs.

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