Texas Firm Pushing Check-Cashing ATMs

A company called Mr. Payroll is attempting to persuade banks to buy a check-cashing machine that doubles as an automated teller.

A subsidiary of the pawnshop chain Cash America, the Fort Worth, Tex., company says its machines can help divert noncustomer traffic from bank tellers while splitting fee income with banks for automated check cashing.

"Generally, banks know they have an obligation to cash checks drawn on the accounts of their commercial customers," said Mr. Payroll president Michael Stinson, a former Texas banker.

"But it is very costly to have a group of live tellers having to deal with transactions by people who are not customers of the bank," Mr. Stinson said.

The machines, 4 feet by 3 feet by 8 feet, display a picture of a man with a cowboy hat and a fistful of dollars. Yet its folksy image belies sophisticated identification technology that snaps and stores a photo of the user's face. The photo later is compared against the image of the next person who attempts to cash a check with the same name and Social Security number.

Mr. Payroll machines charge 1% to 3% of a check's face value, although banks that cobrand the machines may choose to absorb the fee. The company guarantees payments on all checks, takes 40% of fee revenues, and gives the rest to the bank.

The machines cost $54,621 each and are used by six convenience stores in Texas, Oklahoma, and Arkansas. Mr. Payroll is negotiating with several large banks and expects about half the machines eventually will be located in bank branches, Mr. Stinson said.