U.S. Check Cashing & Money Transfer Services: A Market Analysis

Date: June 1, 2013
Pages: 145
US$ 995.00
Publisher: Marketdata Enterprises
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)

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This updated analysis by Marketdata Enterprises examines the controversial but growing “alternative financial services” sector — a $34 billion business comprised of fragmented and loosely regulated check cashing and money transfer services. Payday loan stores and pawn shops are also considered. These outlets serve 35% of the U.S. population. Many companies are happy to accept the business of consumers with spotty credit records who have been rejected by banks--the 12 million “unbanked” households that choose not to use traditional banks.

There are 11,800 check cashing outlets, and nearly 1 million money transfer agents competing for this business today. Many outlets/services overlap—providing multiple services at the same site. The study explores why check cashers have had to diversify, and the effects of the economic slowdown, competition, and new technologies.

This new study by Marketdata examines the nature of the business, reasons for the growth of non-bank services, immigration trends, industry receipts/growth from 1999-2012, 2013 to 2017 forecasts, average store revenues, extensive customer demographics, key industry trends, federal/state industry regulation/fee caps, self-service check cashing machines, profit margins, franchising, gold buying/selling, global remittance trends, consumer debt levels, reasons for the industry’s improved image, and more. Findings of research studies by: Fannie Mae, Georgetown University, FISCA, Federal Reserve Board, brokerage analysts, Natl. Check Casher’s Assn., state banking departments, The World Bank, INS, U.S. Census Bureau, FDIC, brokerage firms, and more.

This study is believed to be one of the few in-depth publicly available business analyses that exists of this market. Seven in-depth company profiles (some with 2008-2012 financials) are provided for: ACE Cash Express, Check Into Cash, DFC Global, Western Union, Moneygram, Ria Financial, Check Into Cash, and AMSCOT Finacial.


  Definition of the components of the U.S. market serving consumers outside of the traditional financial services market (the “unbanked”). Alternative financial services: Check Cashing Stores, Money Transfer Services. Definition of each segment, nature of the business/how it works, number of outlets, reasons for growth, dollar mkt. size 1999-2012, 2013 & 2017 forecasts, major competitors.
  Major market trends affecting each sector: move into payday loans and diversification to other services, state regulation, increased competition, industry critics, consolida-tion, etc.
  Effects of the recession, 2008-2011 mkt. performance, new technology, shift to electronic payments via debit cards, U.S. immigration trends, remittance inflows/outflows
  2012 & 2013 outlooks for each segment
  Composition of check casher revenues by type: 2007 vs. 2012
  Discussion of reasons for growth of non-bank services, population below poverty level.
  Discussion of household debt levels.
  Discussion of bankruptcy trends.
  Discussion of annual U.S. immigration.


  U.S. Population Living Below the Poverty Level (1990-2011)
  Reasons Why Unbanked Families Do Not Have Checking Accounts
  Market potential: 1999-2012 estimated $ receipts of check cashing outlets, money transfers, pawnshops, payday loan services, total industry.
  Check cashing industry revenues: 1999-2017
  The major check cashing franchises: no. of outlets 2005, 2007, 2012
  Money Transfer Industry Revenues: 1999-2017


  Discussion of the unbanked population, Findings of FDIC survey: percent and no. of unbanked households
  Banking status for select demographic groups
  Use of pre-paid debit cards, alternative financial services used most often
  Reasons unbanked households don’t have a bank account
    Table: 1999-2012 market potentials of the major market segments: check cashing, money transfer, pawn shops, payday loans, total
  Trends in consumer debt levels – discussion, last 5 years, delinquencies, analysis by Federal Reserve, 2007-2010 improvement trends
    Table: Debt payments relative to family income: 2001, 2004, 2007, 2010 – by age of household head, % of income, % of net worth, housing status, past due status, discussion of mortgage vs. consumer debt levels
  Bankruptcy trends: 1991-2012, non-commercial bankruptcies, (chap.7,11,13), Discussion, table, state differences
  Foreclosure trends – discussion, recent trends, now vs. recession period
    Table: U.S. population living below poverty level: 1990-2011.


Summary & Nature of the Business: How Check Cashing Companies Operate
  Industry definition and size. Number of outlets. Check cashers offer convenience for a price. Typical fees charged.
  Other services offered: money orders, wire transfers, electronic bill payments, notary signatures, utility bill payments, tax preparation, gold buying, payday loans.
Industry History and Evolution
  Beginnings in the Great Depression.
  Impact of deregulation of the U.S. banking industry.
Customer Demographics (by gender, income, race, etc.)
  Scarborough Research study.
  Ace Cash Express customer profile.
  FISCA 2006 trade group customer profile
Emerging Industry Trends
  Check cashing fees on the rise, Consumer Federation of America survey
  Federal Reserve Payments study, data for 2000, 2003, 2006, 2009
  The entry of Walmart into the check cashing market discussion
  More competition from: Pay By Touch, 7-Eleven, Walmart
    Table: Number/value/avg. value of commercial checks processed: 1989-2012
    Table: Number/value/avg. value of government checks processed: 1989-2012
    Table: Number/value/avg. value of postal money orders processed: 1989-2012
Industry Regulation
  Federal Regulations, state regulations
  Definition of: The Bank Secrecy Act, Money Laundering Suppression Act, USA Patriot Act, Gramm-Leach-Bliley Act
    Table: Check Cashing Fees, by type check List: List of state check cashing fee caps, by state: Sept. 2012
    Table: State Banking Departments for States With Check Cashing Fee Maximums, address & phone.
Industry Size, Growth, Forecasts
  Discussion of avg. annual receipts per store: for Illinois stores, ACE Cash Express, AMSCOT, DFC Global
  Discussion of 2008-2011 market performance/trends, rise of payday loans
  Number of outlets declining – discussion, data from 13 state banking depts.” No. operating in 2007 vs. today
  Composition of check cashing revenues by type (check cashing, money orders, $ transfers, debit cards, bill payments, gold buying, tax preparation, pawn services, etc. % of total revenues) – 2012 vs. 2007
  Discussion of no. of payday loan outlets, market value.
  Industry sales and number of projected units for 2008 – 2013
  Factors affecting growth in 2013 and 2017 – Marketdata forecasts.
  Federal Reserve findings of non-cash payment trends: checks vs. debit cards
  Discussion of the major franchises: start-up costs, franchise fees, royalty, no. units
    Table: Industry sales: 1999 through 2012, 2013 & 2017F.
Check Cashing Industry Structure & Profit Margins
  Review of the composite financial statements for check cashing outlets in New York State and Illinois.
    Table: Illinois check cashing revenues: 2007-2011, dollar volume, avg. fee/check, check cashing fees & total revenues
    Table: Illinois check cashing outlets, revenue mix by type: 2007-2011
    Table: Composite income statement of Illinois check cashing outlets (2011), profit Margins
    Table: Composite balance sheet of Illinois check cashing outlets (2011), assets & Liabilities by type
    Table: The major check cashing franchises at a glance, number, fees, capital needed
    Table: Check volume & fees reported: 1993-2006, New York banking dept.
    Table: Composite balance sheet of NYS check cashing outlets (2003-2006)
    Table: Composite income statement of (NYS) check cashing outlets (2003-2006)

Competitor Profiles (headquarters location, services, detailed financials, mergers, history and company profile)

  Ace Cash Express, Inc.
  Check Into Cash
  Dollar Financial Corporation
  AMSCOT Financial


Nature of the Business
  The transition from the money order to the electronic wire transfers,
how electronic transfers work.
  Market drivers: analysis of global migration trends, U.S. population vs. foreign born, illegal immigrants
  Discussion of remittance inflows/outflows, factors affecting, work visas
  Industry trends: discussions of:
  Industry is being driven by the rise in global immigration.
Regulation of the Industry
  Review of state & federal regulations.
  Definition of: The Bank Secrecy Act, Money Laundering Suppression Act, USA Patriot Act, Gramm-Leach-Bliley Act
Industry Trends
  International money transfer market is very fragmented.
  Major players have a small market share. Number of Western Union & Moneygram agents worldwide, role of Wal-Mart, mobile finance
  New technologies present new competition, discussion of 3 transfer models used, mobile finance
  Discussion of collapse of Moneygram.
  U.S. banks are developing services for the U.S. Latin America transmission corridor.
    Table: Global migration trends, by world area: 2000, 2005, 2012
    Table: U.S. population, foreign born pop., illegal immigrants: 2001-2011
    Table: U.S. immigration, by country of origin: 2001-2011
    Table: Global remittance inflows, developed/developing nations: 2001-2012
    Table: Destination of outflows from the U.S. – World Bank, other data
    Table: Global Wire Money Transfer Market Share, by company (2004, 2007)
    Table: Number of Western Union and Moneygram Agents Worldwide (2002-2012)
    Table: U.S. Bank money transfer products
Industry Size, Growth, Forecasts
  Industry revenues for 1999 through 2012 discussion & analysis
    Table: Size of U.S. money transfer industry, revenues 1999-2012, 2013 & 2017 forecasts
    Table: Size of U.S. money transfer industry, by company (Western Union, Moneygram, Ria Financial, Post Office) 1999-2012
Competitor Profiles (headquarters location, services, company history, recent developments, financials).
  Western Union
  Moneygram International
  Ria Financial Services


  Address, phone, contacts for major trade groups, consultants, list of industry studies and articles, Wall Street analysts/research reports.
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