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.

The $300-billlion check-cashing business “is not a huge money maker,” says Gwenn Bezard, research director at Aite Group and co-author of the report.  “But if banks are really committed to going after the unbanked and underbanked segment they want to look at increasing their market share. Check cashing is an entry point to develop further business.” Banks could inexpensively turn their branches into “walk-in, multipurpose” destinations where check-cashing customers could pay their utility and phone bills, Bezard suggests. Banks should consider adding prepaid cards to their offerings, too. “You see them at every major retail operation,” he says, but rarely at bank branches—“not even stacked on a rack.” Just making prepaid cards available would be a step in the right direction.

Banks could focus the effort on “some high traffic locations,” according to Bezard, not every branch. Relatively small adjustments could produce a “significant uptake” in a year or two.

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