If you are thinking of starting a new business or expanding an existing one, offering check-cashing services is an incredible opportunity. It allows you to cater to the financial needs of a huge number of unbanked people who rely on check-cashing services to manage their finances.

Statistics reveal that roughly 35 million people in the United States opt for check cashing services at an outlet every year. This further shows the potential for growth and revenue this business model offers.

This article is your ultimate guide to the check-cashing business and how it works. Let's dig in!

What is A Check-Cashing Service?

Check-cashing service, as the name suggests, enables customers to cash their checks, including government or payroll checks, for a small fee without going to a bank. This service provides quick cash access to people who either don't have a bank or rely on this service due to its high flexibility.

The centers or stores that offer these services to customers are represented by Financial Service Centers of America (FiSCA). As per them, there are approximately 13000 such stores in the US, doing over 350 million transactions a year.

How Does Check-Cashing Business Work?

The check-cashing business is simple: A customer approaches you with their check, and the process begins. The check casher at the counter will request that the customer submit necessary documents, such as a valid, current government-issued ID, such as a driver's license or military ID.

Once the verification is complete, the customer will get the cash without any holding period, unlike traditional banks. However, the customer is charged a small fee on each check that may vary depending on the check-cashing platform and the check amount.

For instance, Walmart charges $4 for a check of up to $1,000 and $8 for anything larger than this amount. Nonetheless, you can set a fee that suits your business model, ensuring a continuous and stable revenue stream.

Why Start a Check-Cashing Business?

The check-cashing business offers a lot of benefits, some of these include:

• Revenue Potential: Did you know that around 6% of the US population is unbanked? Yes, it's true! This shows that millions of people in the country still need check-cashing services. You can open this business to cater to such a huge audience for a little, achieving high and consistent revenue.
• Low Barrier to Entry: Another reason to opt for a check-cashing business is its low entry barrier. You can easily start providing this service by opening a kiosk in a retail store with minimum capital, as it doesn't require a lot of inventory for operations. This makes it best for you if you don't have enough funds required for other businesses.
• Growth Flexibility: The growth potential of a check-cashing business is enormous. It enables you to set any price for transaction fees, which potentially brings in good revenue. In addition, as the volume of transactions increases and you gain customers' trust, you can expand your business to include money orders, bill payments, prepaid debit cards, and payday loans.

Along with these attractive benefits, you may face some challenges when starting a check-cashing business. For instance, you are required to implement the Anti Money Laundering (AML) program and keep records of all transactions. In addition, there may be instances where you end up with a fake or forged check, resulting in losses.

Conclusion

Offering a check-cashing service is a great business idea as it resolves the issues of unbanked and underbanked people. So, if you are all set to kickstart this business journey, you need reliable check-cashing software.

TeraCash is the ideal option in this regard. We offer advanced check-cashing software designed to handle all types of checks, automate financial record-keeping, and support point-of-sale transaction modules. So what are you waiting for? Get in touch with us today to streamline your check-cashing business and maximize operational efficiency!