Recently BetaKit wrote about BlueKite, a cross-border bill payment solution that evolved out of helping the “unbanked,” or those without bank accounts, pay their bills, primarily in developing countries. While it has a different focus, cash transaction network PayNearMe has a similar goal of helping people pay for items in cash that would traditionally require a bank account or a credit card. Today the company is debuting PayNearMe Express, a new feature to help businesses of any size accept cash remotely for goods or services.
Launched in 2009 and formerly called Kwedit, PayNearMe allows people to pay cash for items or services at over 8,600 7-Eleven and ACE Cash Express stores in the U.S., meaning that users can pay cash for things like rent and tuition that would usually require a bank account. According to the company, over 25 percent of households in the U.S. don’t have a credit or debit card, so the new feature is an attempt to help businesses whose customers might have cash as their only payment option.
They’ve long partnered with retailers and other businesses like Greyhound and H&R Block that want to let their consumers pay with cash, but those partnerships are on a case-by-case basis, and require several days of set-up with the IT department to integrate PayNearMe’s API with the backend (similar to how a company would integrate PayPal’s API to let customers pay via PayPal, they would integrate PayNearMe’s API to add that as a checkout option). In order to pay via PayNearMe, consumers can choose PayNearMe as an option when they check out, print a receipt called a PaySlip with a barcode on it or get it sent to their smartphone, and bring that into a 7-Eleven or other supported location to pay cash, where the cashier would process the transaction like they would a gift card.
The company recently launched a $499 monthly Pro account that required less (but still some) back-end integration, which led them to the idea of a solution that would allow SMBs to use PayNearMe to accept cash. PayNearMe Express is a self-serve version of the company’s existing platform, meaning that businesses can get set up in under an hour by entering their business and banking information, and adding a unique piece of information (customer number, address) for each customer. Rather than print a PaySlip from a vendor’s website when they make a purchase, consumers would instead visit PayNearMe’s website and enter the company or individual’s name, print the PaySlip, and then pay in cash at the store like they usually would.
PayNearMe CEO Danny Shader said in an interview that his team saw the opportunity to expand the product if they could get the implementation down to under an hour. “What it lets us do is go from serving hundreds of large accounts to literally tens of thousands of small accounts,” he said. “It’s really the first payment system that lets essentially any remote business accept cash instantly. You can set this thing up really, really quickly without talking to your IT department at all.”
In addition to the launch of PayNearMe Express, the company also announced that it has added $10 million in new funding from August Capital, bringing its funding total to over $30 million. The company’s existing investors, Khosla Ventures, Maveron and True Ventures, also participated in the round.
In terms of who would use PayNearMe Express, the company is targeting businesses that don’t have a physical presence in many cities so wouldn’t traditionally be able to accept cash payments, service providers like landlords and property managers, small lenders and collection agencies, and education providers like day care centers. Companies pay a one-time $199 setup fee, the only cost they incur, and customers paying via PayNearMe pay a $3.99 transaction fee.
In terms of additional plans for 2013, the company plans to expand to more supported retail locations beyond just 7-Eleven and ACE Cash Express stores, likely more convenience stores. All of the partner retailers take a cut of each transaction, along with the promise of foot traffic, since customers have to go into the store to pay. They also want to expand into supporting ecommerce stores, becoming a kind of Shopify for cash transactions, letting small online retailers accept cash from online customers.
With today’s funding announcement and Express launch, the company is trying to be the cash payment solution for businesses of all kinds. Whether it can attract enough landlords, collection agencies, and other local SMBs remains to be seen, but the company definitely has a market of people who prefer to use cash, and enough partner stores to make it a viable local solution.