Academic journal article ABA Banking Journal

Checks Not Chump Change Yet

Academic journal article ABA Banking Journal

Checks Not Chump Change Yet

Article excerpt

"Check cashing was an art," says Drew Edwards. "The check casher sized you up as either a good risk or not." If he was good at it, he would do well.

Edwards says "was" an art because a company he founded in 2002 called El Banco de Nuestra Comunidad offers check cashing and other services primarily to Hispanic customers in the Atlanta area using a centralized, semi-automated system. El Banco still operates, but the technology it used was spun off into a company called Chexar Networks, of which Edwards is CEO.

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In a recent interview, Edwards made the case that the underbanked market-people who have a bank account but are not fully using it, and may be as many as 100 million people-is still largely untapped by banks. A big reason for that is checks, says Edwards.

"Check 21 extended the life of checks," he says. The problem is that banks give provisional credit on deposited checks, and for a large segment of the population-those who live on cash, sometimes by choice--waiting for good funds simply does not work. …

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