The New York Times reported that banks are getting into the check-cashing game, charging fees for the service.
The publication reported that this has been a sea change for lenders, now getting into an arena that has traditionally served lower-income people or the unbanked and which has also been dominated by small businesses.
But now, traditional lenders think check-cashing services can be expanded to broader consumer bases and also have the potential to be lucrative. The shot across the bow is that two traditional lenders have started offering such “instant funds availability” on the heels of a check deposit. Critics charge that additional fees may be levied on users, including lower-income ones, as this could conceivably become an everyday banking service. And, said some critics, funds would usually be available relatively soon anyway, without the attendant fees. And it should be noted that check use is on the decline.
Fees can range from 1–4 percent, as promoted by Fifth Third Bank via its Express Banking offering through its mobile app, with the average check cashed being $200–$400. NYT noted that Fiserv, a tech and consulting company, has been selling its Immediate Funds service to banks. A Fiserv survey found that seven of 10 respondents would use check cashing on at least a monthly basis.
