“”Alternative” Financial Services market Worth $36+ Billion

Nov. 10, 2020 - Marketdata Publishes New Report:

"The U.S. Alternative Financial Services Industry: Check Cashing & Money Transfer Services, Pawn Shops, Payday Loans, Rent-to-Own Stores"

There are millions of households in America with low incomes and poor credit that find dealing with traditional banks to be difficult. They have chosen instead to patronize “alternative financial” services that provide extended hours and less restrictive credit policies—local check cashing and money transfer outlets, pawn shops, rent-to-own stores and payday loan services.

This is an industry that is still in demand, despite criticism by some consumer protection groups that high fees are taking advantage of users. Only when banks are open 7 days a week and not just from 9-5, and are willing to make small loans or advances under $1,000 on the spot, will this industry disappear.

I don’t see that happening anytime soon.

Here are the top six things to know about this sector:

  • Market Value & Growth…  Marketdata estimates that the market was worth $37.6 billion in 2019 -- 1.8% less than in 2018. The industry’s peak was 2013, when the market was worth $43.8 billion. Marketdata forecasts a 4.3% decline in revenues this year, to $36.0 billion, due to the pandemic and recession. For the long-term to 2025, Marketdata forecasts 3.03% average annual gains to $41.5 billion.
  • Lots of retail outlets…. There are 12,000 U.S. check cashing stores, 14,000 payday loan outlets, 800,000 money transfer agents, 11,000 pawn shops and 10,000 rent-to-own stores competing for this business today.
  • Type of Service…  Pawn shops was a $13 billion business in 2019. Check cashing is worth $1.7 billion. Money transfer is worth $7.8 billion. Payday loans and online apps is worth $4 billion. Rent-to-own stores take in $11 billion.
  • Effects of Covid-19… Not all services have fared equally this year. Rent-to-own stores’ revenues are estimated gain 6% this year, as home-bound customers loaded up on rented merchandise such as computers and appliances during the Spring.  By contrast, revenues in 2020 are expected to be down 22% for check cashing outlets, down 12.2% for money transfer services, down 2.6% for pawn shops, and down 15% for payday loan companies. These outlets are considered essential services and have been open during the pandemic.
  • More online services…. Several apps (Dave, Earnin, Elevate) have been developed, accelerated by the Covid-19 pandemic. Online services account for an increasing share of the business in all five sectors, especially for small installment loans that are replacing payday loans.
  • Big Chains Look South for growth…  The largest competitors such as Purpose Financial, Populus and First Cash (Advance America, ACE Cash Express brands) have grown via the acquisition of smaller players, franchising, new technologies, and expansion into overseas markets such as Latin America.

For More Information or To Order This Report:

See our website: marketdataenterprises.com, Buy Reports, Report FS73.  The complete Table of Contents can be requested by email, or see the Services tab on our home page, then choose.. Studies, Scroll for report FS73 description. See Table of Contents link.

The report is 211 pages long, contains 66 tables & charts, and has 19 in-depth competitor profiles. Price is $1,995, but it can also be purchased by chapters: Check Cashing Industry - $595, Money Transfer Industry - $595, Pawn Shops Industry - $595, Payday Loans Industry - $495, Rent-to-Own Stores Industry - $395. Call Marketdata to place chapter orders (813-971-8080).

A 32-page Overview summary is available for $99. It contains the highlights from each chapter of the complete 211-page report, with status reports on each of the 5 sectors, and 2020 and 2025 forecasts.

Report Description...

This updated analysis by Marketdata examines the controversial  “alternative financial services” sector — a $36 billion business comprised of fragmented and loosely regulated check cashing and money transfer services, payday loan services, pawn shops and rent-to-own stores. These retail and online outlets serve the “unbanked” segment of the U.S. population. Many companies are happy to accept the business of consumers with spotty credit records who need cash fast, and who have been rejected by banks--the 12+million households that choose not to use traditional banks.

There are about 12,000 check cashing stores, 14,000 payday loan outlets, 800,000 money transfer agents, 11,000 pawn shops and 10,000 rent-to-own stores competing for this business today. Many outlets/services overlap—providing multiple services at the same site.

The study explores the effects of the current pandemic and recession on operations and revenues, increased competition and disruption by new start-ups, industry consolidation, state and federal regulation, consumer attitudes, and the shift to online virtual distribution channels.

This new study by Marketdata examines the nature of the business, reasons for the growth of non-bank services, immigration trends, industry receipts/growth from 1999-2019, 2020 outlook and 2025 long-term forecasts, average store revenues, customer demographics, key industry trends, federal/state industry regulation/fee caps, self-service check cashing machines, profit margins, franchising, gold buying/selling, global remittance trends, consumer debt levels, and the pivot to online services. Findings of research studies by: FISCA, Financial Health Network, Federal Reserve Board, brokerage analysts, APRO, Consumer Financial Protection Bureau, state banking departments, The World Bank, INS, U.S. Census Bureau, FDIC, and more.

Contains 19 in-depth company profiles (with financials) for: Purpose Financial (Advance America), Populus (ACE Cash Express), Check Into Cash, Check ‘N Go, EZCorp., First Cash, Curo Group Holdings, QC Holdings, Western Union, MoneyGram, Euronet, Earnin, Elevate, Enova, Aaron’s, Rent-A-Center and AMSCOT.

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