The Business of Check Cashing

Another model is embedding the check cashing into a larger suite of services. Cash App is a notable standout here (and, IMHO, probably the most interesting financial product the tech industry has created for the un-/underbanked.) On the backend, Cash App has simply convinced a bank to have a wider risk envelope as part of the price for working with

The continued march of direct deposit and earned wage access products keeps more of the wage pie in the pockets of workers, even those in diminished circumstances.

That bank does not cash the daily envelope of checks for free, either. It had a consequential commercial negotiation which took notice of the business’ risk profile, high operational costs associated with their custom, and the near certainty that they would be very annoying to work with. The bank ultimately quoted a price per check and, very likely

Government checks don't have credit risk directly , they have operational risk which becomes a credit risk. In the case where either the person cashing them isn't the person named on the check, or where the government later comes to the conclusion that it didn't really want to pay them, that money could (at some risk) be clawed back from the bank,

The world’s financial system is predicated on the U.S. government being definitionally zero credit risk when denominated in dollars. Every other kind of debt in the world is defined in reference to a Treasury.