Why don't more businesses cash employee paychecks?

Question

If they take a percentage on it, they make money for doing nothing and if they don't, they save transaction costs.

Answer 1

You mean cash their own employees' paychecks?

Probably because most don't keep that much cash on hand, especially if they have more than a few employees.  The only job I've ever had where my employer cashed my check was a summer job working at a liquor store.