Check cashing stores are still the primary source of financial services for underbanked or unbanked consumers.
According the the Aite Group, this group of consumers seldom use electronic payments. Instead, they rely on more traditional payment methods such as cash, checks and money orders.
Mainstream financial services company will have a difficult time weaning the underbanked and unbanked consumer away from reliance on check cashing stores. Although some of these consumers receive funds from check cashing on a prepaid card, the cards are used primarily as a substitute for cash.
Unbanked and underbanked consumers are certainly not good candidates for electronic bill payments. For the most part, they remain outside of the mainstream financial services markets.
Results from the Aite Group survey realed that only 5% had paid a bill through an online banking site, although 13% had paid at a company website, and 8% had paid bills by the phone. Most often, however, bills were paid by mail or in person. The survey said that 31% were heavy cash users, 31% were heavy check users, 25% heavy money order users.
Are you a check cashing store that needs payment processing?
Contact info@nationalACH.com today