Checking is a service broadly available in the UK where a bearer of a 3rd party cheque can get instant cash with ease without going through the hassle of conventional banking. In UK, this industry is regulated by Her Majesty's Revenue and Customs (HMRC) as a Money service business and by the Office of fair trading (OFT) when money in advance services are provided along with the cheque cashing.
Benefits of a cheque cashing service
Many wonder what benefits are offered by cheque cashers in today's day and age where high street banks are readily available throughout the country. There are some key reasons and benefits of this service.
Many do not like to operate a bank account of their own, or in some cases one may find it difficult to open a conventional high street bank account due to their past credit history or for not meeting some other conditions. Check cashing service is the only alternative for such people to get their 3rd party checks cashed.
Access to instant cash. Even people who are already having bank accounts do use this service if they need cash instantly, as typically a high street bank will take up to 5 working days to cash a 3rd party cheque. But a cheque cashing service will provide instant cash, to meet immediate financial needs.
Availability with flexible hours. Typically cheque cashing services are open for longer hours than high street banks. So one can pop into a check cashing service after a working day, and walk home with hard cash.
Some cheque cashing services offer cash in advance for certain types of cheque. This is a convenient way to access money on an emergency.
service is available for anyone needing to encash a 3rd party cheque provided that they can prove their identity as per regulations. It is widely used among sole traders, SMEs, part time workers and those who undertake small odd jobs on a regular basis.
How does it work?
The customer can walk into any of the many cheque cashers all around the country with a 3rd party cheque drawn in their favor. The cashers will validate customer identity and perform further checks that are mandated by money laundering regulations. If they are satisfied, they will offer the customer instant cash after deducting the fee from the face value of the cheque. The fee charged will vary from casher to casher and in some instance based on locations. So customer can walk out with ready cash, while the casher will bank the cheque for it to be paid by the drawer of the cheque.
The cheque cashers have to be registered with HMRC as a money Service business and are governed by them for money Laundering Regulations. In UK British Cheque cashers association (BCCA) is the widely recognized trade association for companies providing cheque cashing and short term loan services. They represent their members in governmental and regulatory bodies here in the UK and in EU. They also act as an informal regulator of the industry through their constitution and strict code of practice.
Future of this industry
UK government had a plan to phase out cheque as a method of payment by 2018. But in summer of 2011 the Treasury committee reopened the inquiry on future of cheque in light of public concern on above move. Subsequently in July 2011 the payment council withdrew its plan for the abolition of checks and undertook to maintain the cheque system indefinitely. So this as and industry is secured for a foreseeable future.