Find the latest episode of "The Uncertain Hour" here. Listen

Wal-Mart will cash your checks, too

Marketplace Staff Sep 27, 2007

Wal-Mart will cash your checks, too

Marketplace Staff Sep 27, 2007


Doug Krizner: Those too poor to have a bank account rely on storefront check cashers. The high fees make it a lucrative business.
And now, a growing number of banks, including Wal-Mart, are cashing in on the business. From WCPN in Cleveland, Mhari Saito reports.

Mhari Saito: Lacretia Banks has bounced way too many checks, damaged her credit rating and now can’t get a bank account. But KeyBank, a giant based in Cleveland, wants customers like her.

Lacretia Banks unzips her purse and pulls out nearly $4 to cash her $250 paycheck at Key, even though she doesn’t have an account.

Lacretia Banks: You’re in and you’re out. When you go to a bank, you’re in and you’re out. And with other check cashers, their fees are too high.

Americans spend $11 billion every year on check cashing, money wiring, and utility payments. More mainstream financial services have noticed that’s an attractive chunk of change.

KeyBank’s Michael Griffin:

Michael Griffin: We were seeing check-cashing places pop up on every corner, and thought, you know, we’re a bank — we can do that better than they can do that. So why wouldn’t we get into this business and really approach the un-banked as a market segment?

US Bank is also expanding cheap check-cashing services.

And it’s not just banks courting the un-banked. Wal-Mart has been cashing paychecks at customer service desks for years.

But now, Wal-Mart’s John Metz says, the company is boosting demand by offering separate financial-service desks.

John Metz: When we separate these businesses, we see a huge up-tick in the money services.

Wal-Mart plans to open 1,000 MoneyCenters by next year.

Jean Anne Fox at the Consumer Federation of America says this can help un-banked clients get back on financial track.

Jean Fox: Just cashing checks for consumers at a lower price then you would pay at a storefront check casher, I mean that’s an improvement. But we want to graduate folks to having real depository accounts, as long as they’re safe to use.

That’s ultimately KeyBank’s goal, and it’s working with a nonprofit to help customers improve their credit. So far, Key has served 10,000 check-cashing clients, and is waiting to see how many will move into other bank products.

In Cleveland, I’m Mhari Saito for Marketplace.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.