Mobile wallets have long struggled to displace cash and cards, so Ingo Money chose a different target: check-cashing.
For nearly 15 years, the Roswell, Ga.-based risk management and check cashing provider has built a reputation as savior for consumers living paycheck-to-paycheck. Its services came primarily through prepaid card accounts, but through a new agreement with First Century Bank Ingo Money released an expanded mobile app that allows deposits in all card or bank accounts, not just prepaid card accounts.
"We believe that the traditional bank deposit is broken because the promise to pay is really slow to consumers, especially the ones who really need that money," said Drew Edwards, CEO of Ingo Money.
This slowness has given rise to check-cashing businesses, overdraft fees and the prepaid card industry, Edwards said. "We are focused on fixing that broken deposit with what we call a prepaid deposit."
Unlike other bank technologies that offer remote check deposit for consumers, Ingo Money calls its version remote check cashing because the company essentially "buys the check" and makes a digital payment to the user's account, Edwards said. The goal is to chip away at the friction of what the company says is a $26 trillion paper check industry.
"We are not against bank deposits, but the reason so many check-cashing customers go to a cash-checking service half of the time is to get cash and then maybe put that cash in the bank," Edwards said. "They do that so the bank can't take that money back from them [if check bounces]."
Ingo Money has many of the same risk-management tools that check-cashing services have used, plus many of the vendor's own anti-fraud techniques, said Ben Jackson, a senior analyst at Mercator Advisory Service.
"They have fairly sophisticated algorithms to figure out if a check is good or not, and pick up the nuances of a good check vs. a bad check," Jackson said.
Those enrolling in Ingo Money's service provide a Social Security number, which is used along with many other data points such as the phone's activity and the user's or check writer's past financial track record.
As a virtual check casher, Ingo Money is "really a risk management company that gets paid for lending money," Edwards said. Users pay a 1% fee on most checks for which they want funds immediately available, but the service is free for those who can wait 10 days while still getting an irreversible guarantee on the funds.
Even though Ingo Money has far more risk management tools in place than when it first started in 2001 as a service for Hispanic immigrants to cash checks, the business of guaranteeing payment on checks remains risky.
"We write off hundreds of thousands of dollars in bad checks, so it's not an exact science," Edwards said. "But as long as there is check fraud out there, I guess we will be in business."
The Ingo Money app, available as a separate download, is also embedded in the NetSpend prepaid card app and the T-Mobile network app.
"We are getting ready to surpass 500,000 consumers by the end of the year," Edwards said.
The Ingo Money App operates like a digital deposit wallet, rather than a payment wallet. The virtual cards in the Ingo wallet represent accounts to which check payments are deposited. The same cards, when used for payments, may be plastic cards in a physical wallet or a virtual card on Apple Pay or some other mobile wallet, Edwards said.
More than 180 prepaid card managers and 13 issuing banks currently partner with Ingo Money network, Edwards said. Ingo's acquisition of Fuze Network in late 2014 helped the company set the stage for more mobile services.
The company provides a service that many middle Americans find helpful, Mercator's Jackson said.
"It's a good way to cut some fees and cut some time spent going to a check-cashing station," Jackson said. "The liquidity is important for people who live paycheck to paycheck."