Emerging Payments

PayNearMe Adds Self-Service System for Online Payments with Cash

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While the rest of the industry focuses on technology to replace cash, PayNearMe knows many people still use cash and wants to help these consumers make online payments easier with its new PayNearMe Express service.

PayNearMe Inc. launched the PayNearMe Express self-service system today to allow merchants to accept cash remotely from their customers. The self-service option allows any merchant to sign up for the service in under 15 minutes for a $199 fee.

PayNearMe provides a payment slip consumers can bring to one of the 7,000 7-Eleven or 1,600 ACE Cash Express locations that work with the California-based company. That location takes the slip and accepts the cash payment on behalf of the PayNearMe merchant. PayNearMe then notifies its merchant clients that the funds have been accepted. The bar code can also be displayed on the customer’s smartphone.

There’s a large population that still prefers to pay with cash, says Danny Shader, CEO at PayNearMe. PayNearMe helps the unbanked, teenagers and other consumers make payments without relying on money orders or cashier's checks.

"These are very distinct audiences but together they represent a very large part of the U.S. economy," Shader says.

PayNearMe has a growing number of competitors. In April 2012, Wal-Mart Stores Inc. introduced "Pay with Cash." The service allows consumers to shop online and then pay with cash by presenting an order number and emailed receipt at the retailer location.

PayPal began offering a card last month to allow consumers to load cash to their PayPal accounts. The card, which resembles a Green Dot MoneyPak card, is sold in stores for cash. Users then type a code from the card at PayPal.com to load the funds. PayPal also allows cash loads from Coinstar machines.

7-Eleven Inc. has been at the forefront of offering its customers a broad range of alternative financial services options. The convenience store sells both Green Dot and NetSpend prepaid cards, plus Western Union’s MoneyWise reloadable debit card.

Alarca Realty, a Charlotte, N.C.–based firm, uses PayNearMe as a way for "tenants to complete more timely and convenient payments," says Mandy Wilson, who works at the realty company as a marketing manager, office manager, administrative assistant and in tenant relations.

"PayNearMe has saved us time and energy on collecting payments from our tenants," Wilson says. "Many of the transactions we receive are time sensitive, so the fact that the PayNearMe program can have their payment to us within minutes is extremely helpful."  

Merchants most interested in the PayNearMe network include landlords and property managers, self-employed teachers, such as music or art instructors, and collections agents.

During PayNearMe’s beta testing of Express, the company saw much interest within the property management sector. Some landlords used PayNearMe in their advertising.

The service "allows tenants to pay the way they want at an area close to them … and also on nights and weekends when most payees would be unavailable to accept payment," Shader says.

The payment option has received positive feedback from Alarca Realty’s clients. Wilson estimates about 90% of people informed about the service have used PayNearMe.

The service will help PayNearMe serve tens of thousands of customers, Shader says. The company's transaction volume tripled from 2011 to 2012, and Shader predicts it will continue to grow in 2013.

PayNearMe's offering is complementary to Square's mobile card reader, says Shader. Square's product allows small and medium-sized businesses to accept credit card payments, and PayNearMe allows a new way for the same merchants to accept cash. 

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