Banks can win a lot more check-cashing business from the great numbers of underbanked and unbanked, according to a new study by Aite Group. The results are based on survey of 400 check-cashing store users in Virginia; the state was chosen because is allows payday and low-value short-term loan prohibited in many states.
These customers cash the bulk of their checks—53 percent—at check-cashing stores; 28 percent of their business goes to banks; and 19 percent goes to retail stores and other locations. The report notes that 53 percent of those surveyed have a checking account. Among the unbanked, 21 percent once had a checking account while 26 percent never had an account. “Check cashing stores have a lower wallet share [46 percent] among their checking-account-holding customers than among their unbanked customers [61 percent],” the report notes.