The Business of Check Cashing

Think of a fintech company with a debit card. Square’s Cash App. Chime. Robinhood. Stripe Issuing, and users like Ramp and Bench. All of them, virtually without exemption, are brought to you courtesy of a small financial institution that you are unlikely to have heard of (unless you work in fintech or read Terms and Conditions for fun). Durbin exem... See more

For the largest banks, interchange was the primary way they monetized consumers who lived paycheck to paycheck. If you live paycheck to paycheck, you have high volatility in your income and expenses and you generally don’t keep a balance in your bank account, so the bank relies on interchange fees to profitably service you.

millions and millions of people own U.S. dollars, which means precisely that some bank has a list and there is an entry for them on that list. It’s probably not in Excel, but same basic idea: The bank has a list of dollars in its accounts, the list is not kept via any sort of consensus mechanism or blockchain or whatever; the bank just keeps the li... See more