<Payday Advance and check cashing industry.
Paydayadvanceguide.com offers a manual at a price of $240.00
It details:
The amount of capital needed.
How to select the best location.
How to set your fees.
Where to find state requirements.
How to select your bank.
How to screen customers.
Legal requirements.
Association that can help your business.
Where to obtain the necessary forms and applications.
The software on the market.
Security.
Collection procedures.
Credit reporting.
Check readers.
Controlling employee dishonesty.
Video capture of customers.
Advertising and marketing.
Additional revenue streams.
http://www.paydayadvanceguide.com/bible.html
A similar manual costing $290.45 is available at
http://www.paydayandpaycheckloans.com/payday-training-manual.html
Services provided by check cashing outlets.
Check cashing businesses often provide a number of services in
addition to check cashing. The object of the additional services is to
get customers into the premises. The services include:
Cashing payroll or government checks.
Payday loans or advances for post-dated checks.
Selling money orders.
Distributing welfare payments and food stamps, as a paid agent for the
government.
Utility payment services.
Wire transfers, such as through Western Union.
Selling a variety of items like lottery tickets, phone cards, prepaid
cell phones, beepers, cigarettes and public transport tickets.
Buying and selling gold jewellery.
Offering tax preparation services.
Risks.
1. That the check will be no good.
2. Security and robbery are significant threats since there are large
amounts of cash held on the premises.
http://website.lawinfo.net/expertwitness/CheckCashing.html
Requirements.
A bank account is needed to clear the checks.
Some states require businesses to be licensed.
Regulation.
Check cashing businesses are subject to different regulations in
different states. Some states treat them as financial institutions
whilst others consider them simply as businesses. Approximately 30
states have no legal limits on the fees that can be charged by check
cashing businesses.
The check cashing market.
The U.S. has approximately 11,000 check cashing outlets which cash $55
billion worth of checks annually. The details of a business are given
at this site. Cashing checks accounts for 65% of the $500,000 cash
flow.
A white paper about the industry can be found at
http://www.fisca.org/whitepaper.htm
The outlook for check cashing outlets.
Check cashing revenues are predicted to fall over the next ten years
with the growth of electronic payments. This will result in businesses
closing. Those surviving will be those in the best locations.
http://216.239.51.104/search?q=cache:E_1B0Kdio7MJ:www.swarthmore.edu/SocSci/jcaskey1/Future%2520of%2520Check-Cashing.pdf+%22check+cashing%22+%22best+locations%22&hl=en&ie=UTF-8
Charges.
Charges vary between one-and-a- half and three-and-a-half percent of
the face value of the check. Charges vary depending on the type of
cheque. For example Check King charges 2 percent of the face value of
payroll checks and 1 percent of government checks. Since there is a
greater risk in cashing personal checks these are either not cashed or
a higher fee is charged.
Under Californian law there are limits to the amount that businesses
can charge for borrowing. Up to $15 can be charged per $100 borrowed
for 14 days. Check cashing company ACE is currently facing a law suit
for overcharging of customers.
http://www.consumer-action.org/English/PressReleases/2003_05_22_PR.php
Defaults.
Check King reports that the number of checks that bounce are less than
one in 1000. This figure is kept low by taking the following
precautions:
Personal checks are not cashed.
Checks not generated by a computer are not cashed.
Checks with low numbers are not cashed (they indicate that the company
is new and may not have sufficient funds).
If suspicious, the issuing bank or company are contacted.
http://reason.com/0204/fe.ml.finance.shtml
The default rate reported by ACE in 2001 was 0.59 percent of the face
value of checks cashed. From these returned checks, 67% of the value
was collected. In total 33% of the bounced checks were written off or
0.2% of the face value of the checks. This accounted for 8.4% of
check-cashing revenue.
Demographics
Average age – 35.6 years
Average annual household income - $33,187
Average time in current residence – 4.5 years
Rate of how ownership – 32.8 %
All are employed or have a regular income.
All have an active checking account.
http://www.paydayadvanceguide.com/industry.html
Detailed characteristics of people using check cashing outlets are
given at http://216.239.51.104/search?q=cache:E_1B0Kdio7MJ:www.swarthmore.edu/SocSci/jcaskey1/Future%2520of%2520Check-Cashing.pdf+%22check+cashing%22+%22best+locations%22&hl=en&ie=UTF-8
Best locations.
Urban areas with populations of over 100,000.
http://216.239.51.104/search?q=cache:E_1B0Kdio7MJ:www.swarthmore.edu/SocSci/jcaskey1/Future%2520of%2520Check-Cashing.pdf+%22check+cashing%22+%22best+locations%22&hl=en&ie=UTF-8
Connecticut, Illinois, New Jersey and New York have low legal fee
ceilings therefore offer the least profit per transaction.
Cash now business overview.
http://cashnow.com/cn_bizoverview.html
Industry growth.
http://cashnow.com/cn_market.html
White paper.
http://cashnow.com/cn_white.html
Mississippi check cashers act.
http://216.239.51.104/search?q=cache:6OnWSDeKMD8J:www.dbcf.state.ms.us/Proposed.pdf+%22check+cashing+business%22&hl=en&ie=UTF-8
Ohio check cashing act.
http://216.239.51.104/search?q=cache:eip5dCxr_CcJ:www.com.state.oh.us/ODOC/dfi/app/cc_app.PDF+%22check+cashing+business%22&hl=en&ie=UTF-8
Starting a cash checking business in Indianna.
http://www.in.gov/dfi/consumer/ckcash.htm
Businesses for sale.
http://www.usbx.com/buy/view.asp?listing=181408
http://www.usbx.com/buy/results.asp?segmentKey=209
Equipment
Check cashing system – uses a finger print to verify the customer’s
identity.
http://www.globaltradersdirect.com/mall/Cash%20Registers%20&%20POS%20Point%20Of%20Sales%20Systems/Secure%20check%20Cashing%20Solution.asp
Design of outlets.
The outlets are designed like bank cashier desks with bullet proof
glass.
Franchise companies.
Alpha Check Express (ACE)
Investment required – $1,950 or $4,950
http://www.100franchises.com/alpha_check_express_check_processing_franchise_-_business_opportunities.htm
Franchise information
http://www.acecashexpress.com/franchise/whyretail.html
Cash Now.
Investment required - $50,000
http://www.cashnow.com/franchise.html
Check Cash Plus
http://www.specialmoney.com/checkcashplus.html
Profile of Mr Payroll.
http://businessjournal.net/stories/020697/payroll.html
Start up check list.
For full details see
http://www.irs.gov/businesses/small/article/0,,id=98810,00.html
1. Select a business structure.
2. Write a business plan.
3. Secure finance.
4. Apply for an Employer’s Identification Number (if necessary).
5. Choose your accounting method.
6. Learn about federal business taxes, social security reporting and
employment law.
7. Acquire any necessary licenses.
8. Open a bank account for the business. A brochure to ease the
opening of a bank account is available at
http://www.fisca.org/FiSCA%20Check%20Cashers%20Broch.pdf
9. Equip the business premises.
Equipment needed:
Teller window units with cash drawer and deal tray.
Handicapped access teller unit.
Customer counters.
Bullet proof glass.
Cashiers stools.
Supervisors desk and chair.
CCTV camera system with internal VCR.
Alarm system.
Fax machine.
Color printer.
Receipt printer.
Security and fire safety equipment.
Emergency power.
Interior neon signs.
Exterior sign.
Filing cabinets.
Flooring.
Interior painting.
Finger print checking system.
Check reader.
ID digital camera.
Provide equipment/stock for additional services:
Mail box rental.
Utility bill payment.
Phone cards.
Copy and fax services.
Bus passes.
Stamps.
Photo I.D. cards.
ATM machine.
Tax service.
10. Hire employees.
Check cashing software.
http://www.dataage.com/
SCO
http://www.caldera.com/company/success/story.html?ID=40
Associations.
FiSCA is a national association representing check cashers.
http://www.fisca.org/pr14.htm
The Check Cashers Association of New York (CCANY).
http://www.ccanyinc.org/aboutr.htm
Best Practises for the Payday Advance Industry.
http://www.fiscwa.com/BestPractices.html>
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<Hope this helps.> |
