Saturday, August 13, 2011

Check Cashing: Walmart vs. Banks

It is getting easier to cash checks at Walmart. The retailer announced this week that it will cash more kinds of checks, notably including retirement checks, and will accept more forms of ID for check cashing. Walmart charges a fee of up to $6 for checks up to $5,000 (or the state limit of $2,000 in Florida), but that fee doesn’t seem like much compared the fees charged by check cashing agencies, and now by banks.

Checks are more important now that people are more cautious about using or holding credit cards, but there is another trend involved that may be more consequential, at least for the banking industry. Walmart’s check cashing will take away the need for some customers to have personal bank accounts. Banks may not sweat over losing this segment of their customer base, but like the cable companies, they can’t be happy about the trend. They urgently need to understand why so many of their customers are looking for ways to bypass their services.