The U.S. Check Cashing, Money Transfer, Pawnshops and Payday Loan Services Industry

Table of Contents

Introduction: Study Scope, Sources, Methodology

Executive Overview of Major Findings

• * Definition of the components of the U.S. market serving consumers outside of the traditional financial services market (the "unbanked"). Alternative financial services: Check Cashing Stores, Money Transfer Services, Pawnshops, Payday Advance Lenders. Definition of each segment, number of outlets, and reasons for growth, dollar mkt. size 1999-2007, 2008 & 2013 forecasts, major competitors.
• * Major market trends affecting each of four sectors.
• * Discussion of reasons for growth of non-bank services, population living below poverty level.
• * Discussion of family debt levels.
• * Discussion of non-commercial bankruptcy trends.
• * Discussion of annual U.S. immigration.
• Tables:
  • - U.S. Population Living Below the Poverty Level (1990-2004)
  • - Reasons Why Unbanked Families Do Not Have Checking Accounts (1995-2004)
  • - Debt Service Payments to Family Income (1995-2004)
  • - U.S. Noncommercial Bankruptcies (1991-2006)
  • - Annual U.S. Immigration (1992-2007)
  • - Market potential: 1999-2013 F estimated $ receipts of check cashing outlets, money transfers, pawnshops, payday loan services, total industry.

The U.S. Check Cashing Industry

• Summary & Nature of the Business: How Check Cashing Companies Operate
• * Industry definition and size. Number of outlets. Check cashers offer convenience for a price. Typical fees charged.
• * Other services offered: money orders, wire transfers, electronic bill payments, notary signatures, utility bill payments, and lottery tickets

• Industry History and Evolution
• * Beginnings in the Great Depression.
• * Impact of deregulation of the U.S. banking industry.

• Customer Demographics (by gender, income, race, etc.)
• * Scarborough Research 2006 study.
• * Ace Cash Express customer profile.
• * FISCA 2006 trade group customer profile

• Emerging Industry Trends
• * Check cashing fees on the rise, Consumer Federation of America survey
• * 2007 Federal Reserve Payments study, data for 2000, 2003, 2006
• * The entry of Wal-Mart into the check cashing market - discussion
• * More competition from: Pay By Touch, 7-Eleven, Wal-Mart

• Industry Regulation
• * Federal Regulations, state regulations
• * Definition of: The Bank Secrecy Act, Money Laundering Suppression Act, USA Patriot Act, Gramm-Leach-Bliley Act
  • Table: Check Cashing Fees, by type check
  • Table: List of state check cashing fee caps
  • Table: State Banking Departments for States With Check Cashing Fee Maximums

• Industry Size, Growth, Forecasts
• * Industry sales: 1999 through 2007
• * Composition of check cashing revenues by type
• * Industry sales and number of projected units for 2008 - 2013
• Check Cashing Industry Structure & Profit Margins
• * Review of the composite financial statements for check cashing outlets in New York State.
  • Table: Number and Dollar Value of Payments by Check in the U.S. (2007)
  • Table: The major check cashing franchises at a glance, number, fees, capital needed
  • Table: Check volume & fees reported: 1993-2006, New York banking dept.
  • Table: Composite balance sheet of NYS check cashing outlets (2003-2006)
  • Table: Composite income statement of NYS check cashing outlets (2003-2006)

• Major Competitors: In-depth profiles for…(headquarters location, services, detailed 2005-2007 financials, mergers, history and company profile)
• Table: The Major Check Cashing chains (no. of outlets)
  • Ace Cash Express, Inc.
  • Check Into Cash
  • Dollar Financial Corporation

The U.S. Money Transfer Services Industry

• Nature of the Business
• * The transition from the money order to the electronic wire transfers, how electronic transfers work.
• * Market drivers: global migration trends, US population vs. foreign born, illegal immigrants
• * Industry size.
• * Industry is being driven by the rise in global immigration.
  • Table: U.S. Immigration by Country of Origin (2001-2007)

• Industry Trends
• * International money transfer market is very fragmented.
• * Major players have a small market share. Number of Western Union & Moneygram agents worldwide, role of Wal-Mart, mobile finance
• * New technologies present new competition, discussion of 3 transfer models used
• * Discussion of collapse of Moneygram.
• * U.S. banks are developing services for the U.S. - Latin America transmission corridor.
  • Table: Global Wire Money Transfer Market Share, by company (2004, 2007)
  • Table: Number of Western Union and Moneygram Agents Worldwide (2002-2007)

• Regulation of the Industry
• * Review of state & federal regulations.
• * Definition of: The Bank Secrecy Act, Money Laundering Suppression Act, USA Patriot Act, Gramm-Leach-Bliley Act

• Industry Size, Growth, Forecasts
• * Industry revenues for 1999 through 2007 - discussion & analysis
• * Industry revenue projections for 2008 through 2013
  • Table: Size of U.S. money transfer industry, revenues 1999-2008, 2013 forecasts
  • Table: Size of U.S. money transfer industry, by company revenues 1999-2008, 2013F

• Major Competitors: In-depth profiles for…(headquarters location, services, company history, recent developments, sales 2005-2007, 2008 first qtr. financials).
  • Western Union
  • Moneygram International
  • Ria Financial Services

The U.S. Pawnshop Industry

• Nature of the Business
• * Earliest form of consumer lending.
• * Highly fragmented industry concentrated in southeast & southwestern U.S., no. of pawnshops, avg. interest rates
• * The pawn loan process - discussion.

• Emerging Industry Trends
• * Pawnshops' entry into the payday loan market, reason for decline in number
• * Discussion of why pawn shops have benefited from rising gold prices
  • Table: Number of U.S. pawnshops: 1987-2007
  • Table: Historical international gold prices: 1999-2008

• Pawnshop Customer Demographics (by age, race, gender, income, etc.)
• * Review of the Georgetown study - major findings, profiles of typical customer From Natl. Pawnbrokers Assn., Gregory Elliehausen.

• Regulation of the Industry
• * Review of state & federal regulations, recent anti-payday lending legislation
• * Definition of: The Bank Secrecy Act, Money Laundering Suppression Act, USA Patriot Act, Gramm-Leach-Bliley Act
  • Table: State Regulations on Pawnshop Interest Rates and Fees
  • Table: State Pawnbroker Associations - contacts and phones.

• Industry Size, Growth, Forecasts
• * Discussion of saturation levels vs. payday loan services, comparisons
• * Industry sales, no. of units for 1999-2007 - discussion, avg. shop sales 1999-2007
• * Marketdata estimates of industry sales/no. of projected units for 1999-2007-analysis
  • Table: Pawnshops & US population per pawnshop, by state
  • Table: Revenues and number of units for 1999-2007, forecasts for 2008-2013.

• Major Competitors: In-Depth Profiles for…(Headquarters location, services, company history, recent developments, sales 2005-2007, 2008 first qtr. financials).
• Table: The major pawnshop chains, top 3 companies, no. of retail outlets, pawnshops, revenues, net income - 2007)
  • Cash America International
  • EZCORP, Inc.
  • First Cash Financial Services

The Payday Loan Industry

• Nature of The Business
• * No longer the fastest growing segment of the alternative financial services industry
• * The standard and bank business models - discussion
• Table: Comparison of Standard Payday and Bank Payday Loan Models

• Emerging Industry Trends
• * Check cashing services and pawnshops are entering the payday loan market - analysis
• * Legislative actions constraining growth - discussion of state/federal actions
• * Increased competition from credit unions

• End-User Demographics - Who is the Payday Advance Customer?(by age, income, amount of loan, gender, reasons for loan, etc.)
• * Review of the Georgetown Study - major findings
• * Review of the IO Data study - major findings
• * Advance America' s 2007 customer profile.

• Regulation of the Industry
• * Review of state & federal regulations, recent anti-payday lending legislation
• * Definition of: The Bank Secrecy Act, Money Laundering Suppression Act, USA Patriot Act, Gramm-Leach-Bliley Act
  • Table: Comparison of Payday Loan Terms and Interest Rates by State

• Industry Size, Growth, Forecasts
• * Industry sales and number of units for 1999 through 2007 - analysis
• * Analysis of saturation levels
• * Discussion and rationale for long-term forecasts
• Table: Payday Loan Outlets by State - number, population per outlet.
  • Table: Estimated size of the payday loan industry, units, revenues: 1999-2007
  • Table: Industry sales and number of projected units for 2008 through 2013
  • Table: Industry loan volume and revenue per unit: 1999-2007, 2008-2013 forecast.

• Payday Loan Industry Financials & Profit Margins
• * Review of the Flannery and Samolyk study - major findings, avg. sales per unit, expenses, margins.
• * Discussion of composite industry financials.
  • Table: Payday Loan Outlet Composite Income Statement for a Typical Unit.
  • Table: Payday Lender Loan Portfolio Characteristics
  • Table: Customer Loan Activity (no. of customers, loans, other metrics)

• Major Competitors: In-depth profiles for…(Headquarters location, services, company history, recent developments, sales 2005-2007, 2008 first qtr. financials).
• Table: The major payday loan companies, top 4, 2007 revenues, net income, units
  • Advance America, Cash Advance Centers, Inc.
  • Check Into Cash
  • CNG Financial Corp.
  • QC Holdings

Reference Directory of Trade Associations & Sources

• * Address, phone, contacts for major trade groups, consultants, list of industry studies and articles, Wall Street analysts/research reports.