("Check cashing" in this usage is slightly different than depositing a check, and is mostly used by unbanked people)
The fees are generally on the order of $5 for small checks and 5% for larger checks. This pays for the retail establishment and the not-insubstantial fraud/credit risk.
Sociology work on it is interesting.
(There are many other factors here but I've got less than a day to tweetstorm.)
For one it means siting expensive branches in neighborhoods which are rough to do banking business in.)
Same fundamental experience as a check casher *but*:
* no retail establishment
* persistent, legible-to-the-business identities
* graduated upgrades to more formal financial system
Eliminate that; split difference with consumer.
One of the reasons many un- or underbanked people cannot access the formal financial system is inability or unwillingness to demonstrate formal identity to the financial system. Check cashing apps can bootstrap identity where banks can't (by law).
Check cashing places are, like most small-dollar retail establishments, built on recurring custom. They have very little incentive to tell you "Psst Chase would happily do business with you. Let me introduce you."
There are a surprising number of players involved in even "simple" transactions, and many marketing brands.
The government wants responsible financial institutions to be deputized in the fight against various infractions of the law, down to their least senior front-line employees like e.g. bank tellers.
This combination will routinely have tellers, who by and large do not possess sociology degrees or months of training, to ask probing questions.
But you can walk into a bank and be judged, harshly.