Why is “cheque cashing” a legitimate business?
"This answer is based on my understanding of the US banking system.  We have check cashing businesses here too, which are just like what you describe, except for the spelling :-) Let's consider what ""cash it for free at the bank"" really means, and why it might not be an option for everyone.  One key issue is ""which bank?"" As an example, suppose that I have an account at ABC Bank.  I take out my checkbook for that account and write you a check for $500.  (Terminology: In this case, I am the drawer or maker of the check, ABC Bank is the drawee bank, and you, user54609, are the payee.  Disclaimer: ""You"" here is meant as a generic pronoun and I do not mean to insinuate that anything here actually applies to you personally.) There are two common things you might do with the check: If you have an account at some bank, say XYZ Bank, you might take the check to XYZ Bank and deposit it in your account.  (You might be able to do this through an ATM, mobile app, or by mail, instead of in person.)  XYZ Bank does not have a way to verify with certainty that the check is valid (e.g. they don't know what my signature looks like, nor whether I actually have $500 in my account at ABC), so they send it to ABC Bank, which verifies the check and transfers $500 to XYZ.  (This is usually done through a central clearinghouse, such as the Federal Reserve in the US, and in some cases an image of the check may be sent electronically, instead of the physical check.)  This process takes some time, so XYZ may not make the $500 available to you right away - there may be a hold period before you can withdraw that $500 from your account. You could take the check to ABC Bank, in person.  They will verify on the spot that the check is valid and that you are in fact user54609.  If everything looks good, they will hand you $500 in cash (perhaps subtracting a fee of a few dollars). Now we can see some possible problems with each of these approaches. For 1: Maybe you don't have a bank account at all.  There are many possible reasons: You don't have enough money to meet the minimum balance that a bank account would require. You used to have an account, but you overdrew or otherwise misused an account, so the bank closed it.  They then entered you in a registry such as ChexSystems which ensures that other banks know about this, and so no other bank will open a new account for you. You immigrated to the country illegally and cannot get the documents (driver's license, social security number, etc) that a bank normally requires to open an account. You simply don't like the idea of keeping your money in a bank. Maybe you do have an account at XYZ Bank, but it's in another town.  You need the cash today, so you can't use mail or a mobile app, and third-party ATMs usually don't accept deposits. Maybe you need to spend the money today, and XYZ Bank would place a hold. For 2: ABC Bank may not have a branch you can conveniently visit.  Maybe the nearest one is a long way away, in another city or across the country.  Or maybe ABC is an online bank with no physical branches at all.  Maybe it's in the same city, but you don't have transportation to get you there.  Or maybe it's simply less convenient than the check-cashing business on the corner. Maybe it is after usual banking hours, or a weekend, and ABC Bank is closed, but you need cash now. In any of these situations, ""cash it at the bank"" might not be a viable option, and so you might reasonably turn to a check cashing business instead.  As you say, you will pay a much higher fee there, but maybe it is worth it to you, or you just don't have any choice. Another possibility, of course, is that you are poorly educated about the banking system, and you don't really understand that 1 and 2 are options, or how to go about them.  But there's this storefront on the corner that says ""Check Cashing"", so this seems like a low-stress, uncomplicated way to exchange this piece of paper for money.   As such, there certainly are people who legitimately might want to cash a valid check at a check-cashing business.   Check cashing business do of course take some risk of fraud, since they can't necessarily verify the check.  There are sometimes steps they can take to minimize this risk.  Sometimes they can call ABC Bank and check that I have sufficient money in my account.  Maybe they'll only accept certain kinds of checks, such as payroll checks from well-known companies for which you can produce a matching pay stub.  And they can demand identification from you (perhaps allowing more flexible options than a bank), which helps ensure that you are the payee, and would make you easier to track down if you did commit fraud.   But they will probably lose some money this way, so they will have to make their fees high enough to cover those losses." "In my experience (in the US), the main draw of check-cashing businesses (like ""CheckN2Cash"" is that they will hold your check for a certain period of time.  This is also known as a ""payday loan"".  Rather than bringing them a check someone else has written you, you write them a check yourself, postdated, and they pay you the amount on the check less their fees, and agree not to cash the check until a future date.  So if you don't have the money right now but you need it before your next payday, you visit a check-cashing business and get the money, and it'll be withdrawn from your account after your next paycheck." "How does this get any business? You'd be surprised on how much profit these type of businesses can bring in and the number of people who cash their checks this way. They make profit off people who want their checks cashed ASAP. Usually cheques written to ""cash"" or something can just be cashed for   free at the bank right? Yes, most banks cash your check for free. Some may not cash it right away and may require a few days to process. Some charge a small fee if the check is not from the same bank. Some personal checks may not even be processed the same day as well. Wouldn't the only cheques that people would cash at these places be   bad cheques? Yes and no. Yes because it may be ""easier"" to try to cash a fraudulent check at these type of check cashing places. However, some places may only cash business checks and require your ID in which they write down the information in order to possibly track you down in the future. Also some places only cash a check to a certain amount.  And wouldn't this mean that the business will lose a lot of money   since it pays out cash but then has the cheque bounce?  Of course the business loses money if the check bounces or is fake. That is why they try to minimize their losses with certain requirements that needs to met before the check can be cashed. Who uses these services exactly? Just about anyone who needs their check cashed ASAP or like ChrisW stated in his answer is trying to keep their money on the low. There is a demand for this service even though it may seem shady to you."
"Some years ago I was in a similar situation with a CAD cheque. I did not experience any reservation period of months. Within Canada, around a week was usual, and as far as I remember that was the case also for the cheque deposited to the EUR account.  You could ask your bank whether a certified cheque (has to be done at the ""home"" bank of the sender) will have the same reservation period and what the processing time will be anyways.  I found a large variation of the (large) fees for cashing foreign cheques. It may be worth asking a few different banks for their conditions (both fees and duration for the whole process)." "As far as I can recall, savings and chequing accounts exist due to regulations on the banking industry that put were into effect after the depression to prevent a ""run"" on the bank.   A chequing account is a ""demand"" account, meaning you can go and demand your money, and they have to pay immediately, by means of a withdrawal or a cheque.  Banks used to get out of hand and loan out pretty much all the money they had on deposit, and of course those people with loans just put the money they borrowed into another chequing account and the bank loaned that out to someone else.  The money that people believed they had access to multiplied indefinitely.  However, when everyone goes to take that money out at the same time, you have a run on the bank.  Therefore, government regulations stipulate a % that the bank must have on-hand.  The typical number is 5%.  That effectively limits the money multiplier to 19 times. Savings accounts get around this restriction by putting limits on how much and how quickly you can withdraw the amounts.  They pay you more interest because the money in a savings account is worth more to them, because it's not subject to those restrictions. Some chequing accounts pay interest, but you have to maintain a minimum balance.  Some savings accounts allow you to write cheques, but I assume the withdrawal limitations probably still apply. There's also something to do with deposit insurance (as in, the chequing accounts are covered by government deposit insurance, but savings accounts are not).  I'm not 100% certain of that though." This is a facility called Home Banking, which banks in some locations offer. You do not necessarily have to be super-rich to use it though.  Kotak Mahindra Bank has been offering it here in India for about 10 years now. Other banks have followed suit with similar offerings.  I am not super-rich or anywhere close1, but I have used this facility occasionally when I couldn't visit an ATM or the branch, to either get cash delivered to me, or to deposit cash into my account. The banks do charge a convenience fee for this facility as you might expect, but they waive it off if your average monthly balance exceeds a certain amount. Not sure about how it works in other countries, but here in India, if you have an account with one of the top customer-friendly banks, this facility is as mundane as a cheque book or a debit card.  1 If I were, I probably wouldn't be posting here. ;-) "Once upon a time (not all that long ago), British cheques used to say something like ""Pay to the order of ..,,,, or bearer the sum of ...,..""  (emphasis added) and could be cashed by anyone unless the cheque-writer drew two parallel lines in the upper left corner of the cheque. These lines converted the instrument into a crossed cheque which could only be deposited into a bank account of the payee; a bearer of the cheque could not walk into the bank and waltz out with the cash equivalent. Perhaps British banks no longer use this styling (Indian banks still do) but if that cheque for 60k is not a crossed cheque, it better be sent securely with lots of insurance. An uncrossed cheque is the same as cash since it can be cashed by anyone. That being said, I am with @mhoran_psprep in thinking that all this is just a scam with the OP (mug) being asked to send 3600 bucks to ""girlfriend""  (scammer) to cover the cost of sending the check with full insurance, and when the check arrives and is deposited by OP into his bank, it will turn out to be a dud, and ""girlfriend"" will be long gone.  The description of how the girlfriend signed a contract for 90k and received 60k of this amount upfront, but in the form of a check payable to boyfriend (!) OP reeks of scam; is this scenario realistic?  In the past, I  have received offers (usually from Nigeria) from ""women"" wanting to be my girlfriend, and I am sure that such offers will continue to come in the future...." Law and business go hand-in-hand. Thank your luck that you are not personally experiencing this sort of misuse of our legal system. It can financially ruin people and not everyone is prepared to be sued or even knows what to do if they are. Actually his cheques are from himself, funds are paid to Mayweather Literacy Fund (promotions) then he pays himself.  This was the case with Pac fight, the check was from Mayweather Promotions.  This also means he could just write a cheque for 7 trillion dollars and post it on facebook. The person writing the check has already signed and endorsed it. The depositer's signature is not to confirm the check's validity, but to demonstrate that the check was depisited to the correct Fred Smith's account, and permit charges to be brought if, eg, Fred Bonzo Smith tries to steal Fred Gnorph Smith's check. Whoever told you to make major purchases in physical cash should probably be audited because the only real reason someone would be doing something so goofy would be to avoid digital records or maybe taxes somehow.  ... or worse, they listen to Dave Ramsey.