Our members play an important role in the financial system, often providing financial services to people less likely to use traditional banking.
Why do people use cheque cashing?
The third party cheque cashing service is available to individuals who do not wish to wait for a cheque to clear through the banking system. Even with advances in the speed of the clearance process it stills takes days for money to be made available. For some individuals that is not fast enough and they may require instant cash, for example to pay a pressing bill.
There are also many individuals that do not have a personal bank account but have received a cheque as payment. We know that about 2 million adults in the UK do not have bank accounts, whilst another million who have some form of account prefer to operate in cash.
One of the most frequent types of cheque being cashed is a pay cheque. Thousands of individuals continue to be paid by cheque and so third party cheque cashing is often the most effective way of accessing their wages.
We also know of many that are unable to use their bank account to cash cheques because of personal circumstances – e.g. financial trouble, family issues.
How does cheque cashing work?
The customer, or payee, takes their cheque into a third party cheque casher who will then, make checks to identify and verify the customer.
All third party cheque cashers are regulated, and are subject to rules around issues such as money laundering and data protection. This ensures that cheque cashing is used for legitimate purposes, that a record is kept and that personal information is carefully protected.
If satisfied that the person is who they say they are, and subject to other checks, such as making enquiries about the cheque with the drawer they may decide to cash the cheque for a fee.