The Money Service Business, came into existence in the 1930s in response to the Great Depression. The failure of 10,000 banks left many account holders penniless and with no trust in banks. Again, with the economic landscape times are changing. The Federal Reserve reports that in the past 10 years, a growing number of American households are opting out of checking accounts and formal bank relationships. (See Table below for summary of reasons).

At present, 11% of all American households choose to use money service centers in lieu of banks.₁ This alternative banking solution continues to grow in popularity as conventional banks raise service charges, increase penalties for bounced checks and may require three days or more to gain access to a deposited check. Sixty-six percent of consumers using non-traditional financial service centers said if given the choice to open an account, they were not very likely to do so.₂

According to a 2007 study conducted for the Financial Service Centers of America (FiSCA), an industry trade association, an estimated 30 million consumers conduct more than 350 million financial services transactions in these centers each year worth more than $106 billion.₃

The needs of consumers who often choose not to use banks are both basic and easy to identify. Low-income consumers share four basic needs: (1) immediate liquidity for paper checks (paycheck, benefits check, etc.); (2) the ability to pay bills, rent, etc., often at the last minute to avoid additional fees; (3) the ability to send money to relatives in other states and/or countries; and (4) a safe place to keep whatever is left after the first three transactions. Life in the modern economy gives rise to two additional needs: the ability to build or rehabilitate credit histories and a form of digital currency to participate in the Internet economy.

The check cashing, wire transfer, money order, and bill payment services at money service centers like United Check Cashing offer customers a convenient and inexpensive alternative for managing finances and circumventing credit problems while eliminating the expense of maintaining a formal bank account.

The fast access to their cash, friendly service, easily accessible locations, and convenient hours of operation have attracted a large customer base, and surprisingly 58%₄ of these customers have bank or credit union accounts.

1. Federal Reserve Board Survey of Consumer Finances 2004
2. Synergistic Research Corporation, “Making Dollars and Sense: The State of the Market, 2007
3. Cypress Research Group, “Survey of Key FiSCA Member Organizations on Transaction Volumes, 2007
4. Cypress Research Group, “Survey of Customers of FiSCA Member Organizations, 2006