It is estimated that consumers spend $8 billion annually to cash checks at check cashing outlets. Check cashers reportedly cash 180 million checks totaling $55 billion each year.
In 2006, the average cost to cash a payroll check was 4.11% of the face value. That means a worker would pay an average of $19.66 every week to cash a $478.41 payroll check at a check casher. That amounts to an annual cost of $1,022.32 to cash net earnings of $24,877.
Credit unions can offer check cashing services at far more affordable terms and favorable conditions. Doing so provides them the opportunity to grow their membership with a sustainable product that makes sense for both the member and the credit union.
To encourage more credit unions to jump into check cashing, an open source Check Cashing Implementation Guide is now available. Authored by Nancy Pierce, with support from Credit Union Association of New Mexico and the Texas Credit Union League, the guide provides tested business models and proven check cashing strategies.