Check Cashing Services

October 10, 2016

Check cashers provide access to financial services for individuals who don’t have access to traditional banking institutions. In a restrictive market, check cashers offer financial inclusion and convenience. Despite the positive impact they have, check cashers face discrimination and bear a large regulatory burden.
National Check and Currency supports check cashers so that they can focus on growing their business, serving their customers, and keeping their business open. In spite of ever-changing regulation and perceived “riskiness,” NCC’s clients flourish with redundant MSB banking partners and supported check cashing services.

Issues Facing the Check Cashing Industry

Check cashers face several industry-wide issues. First, check cashing banks are hard to find due to indiscriminate derisking. Second, mobile money and FinTech continue to encroach on the check cashing and payments market.
To help check cashers combat the first issue, National Check & Currency supports check cashers with redundant MSB banking and MSB financial services. NCC’s clients enjoy real MSB bank accounts, innovative technology to increase transparency, and MSB compliance experts at their service.
In light of the second issue, check cashers are implementing creative solutions to stake out their market share. In addition to check cashing, many check cashers also provide a wide array of complementary check cashing services.
But, innovation and compliance aren’t always enough to keep check cashers banked by traditional financial institutions in today’s market environment. NCC interviewed real check cashers’ clients to get their perspective on the issues facing the check cashing industry.
NCC client Jagdeep Hans owns and operates 4 MSB locations for Olney FInancial Services in Philadelphia and Darby, Pennsylvania. His primary service at all 4 locations is check cashing, followed by utility payments, Western Union money orders, the state lottery, an ATM, and fax and copy services. Jagdeep did not face indiscriminate derisking himself, but he saw peer after peer lose their MSB bank accounts.
In order to stay ahead of the derisking trend, Jagdeep switched to NCC before his bank terminated his MSB account. He knew of NCC through his industry connections and turned to them for help so that he could have peace of mind about his banking services. Seeing his peers lose their bank accounts with no warning or explanation spurred Jagdeep to stay ahead of the problem and find banking continuity before his own bank sent him a termination letter.
Jagdeep says, “The great thing about NCC is their cut-off time for check deposits. They allow me to make deposits until 7:45pm. I would be out of business without NCC and their banking relationships and services help me operate by increasing my cash flow. I am very grateful for NCC.”
Like Jagdeep, many other check cashers are diversifying their check cashing services to better serve their clients and firm up their market shares. By providing real MSB bank accounts, MSB compliance expertise, and supported MSB services, NCC enables their clients to focus on their own customers and grow their business.

Complementary Check Cashing Services

Check cashers offer a wide array of MSB services for their clients.  By providing complementary check cashing services, check cashers can draw new customers to their location and add value for their existing customers. The most popular check cashing services are outlined in this section.

Wire Transfer
Money service businesses can offer wire transfer to their clients, which enables them to transfer money electronically. Western Union is the best known wire transfer service used by money service businesses and check cashers. Wire transfer uses a secure communication system to send money between parties, no bank account required.
Money Orders
Money orders are prepaid in full and serve as a payment order for the specified amount. Since the amount is paid in full up front, a money order is often more trusted than a check. Unlike a certified check, however, a money order is limited to a specific face value amount. In the United States, money orders are available through the United States Post Office, pharmacies, grocery stores, convenience stores, and even some banks. Money orders are a valuable check cashing service add-on for money service businesses.
State Lottery
Many check cashers offer a diverse range of check cashing services, including ticket sales for their state lottery. Services and sales for the state lottery include scratch-off tickets, Powerball, MegaMillions, and other lottery formats. Rules, regulation, and lottery offerings vary state by state. For check cashers and money service businesses, the state lottery is an excellent way to add more value to their location and draw in new customers.
Bill Pay
Check cashers offer bill pay services for clients who are unable to pay bills through a traditional bank account. This check cashing service helps individuals pay their rent, electric, gas, and water bill.  For check cashers, this is an important add-on service that enables their clients to cash their paycheck and then immediately pay bills in the same location.
Prepaid Cards
Prepaid cards are sold by money service businesses as a complementary check cashing service. These prepaid cards can be loaded with money by check cashing clients and then used like a debit or credit card. This is a valuable product for people without traditional bank accounts.
Additional Check Cashing Services
There are many more types of check cashing services, including phone cards, tax prep, gift card redemption, fax, copy, and ATM. The types and amounts of additional services provided by a money service business will vary. But, this provides a brief overview of the additional services provided by check cashers to their clients. To learn more about check cashing specifically, see our step-by-step guide to the check cashing process.

Types of Check Cashers

NCC works with a variety of check cashers, including commercial check cashers. The most common types of check cashing businesses that NCC works with include: commercial check cashers, bodegas, grocery stores, laundromats, gas stations, liquor stores, and convenience stores.
Each of these different types of check cashers offers a custom selection of check cashing services to their clients. Based on the nature of the business, state regulation, and business goals of the check casher, the MSB might engage in any of the services detailed in the previous section.

NCC Supported Check Cashing Services

National Check and Currency supports their money service business and check cashing clients through supported check cashing services. These financial services support check cashers so that they can focus on serving their customers.
NCC supported check cashing services include:

  1. Remote Deposit Capture (RDC)
  2. Wire Transfer
  3. Automated Clearing House (ACH) Credits and Debits
  4. Armored Cash Transportation
  5. Same Day Cash Advance
  6. Credit Facilities
  7. Real MSB Bank Accounts
  8. MSB Compliance Expertise
  9. 24/7 Support

NCC is committed to providing expert MSB compliance, redundant check cashing banks, and supported MSB banking services. Call us today at 877-327-4249 to discuss your MSB bank account or fill out the Open An Account Today form on our homepage!

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