Marginalized cash users find e-commerce more welcoming

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As more stores either close down or try to ban the use of cash, they aren't necessarily driving cash users to cards and mobile wallets. Instead, they are driving some to an environment that is, counterintuitively, more cash-friendly than ever: e-commerce.

PayNearMe, which enables cash users to complete a purchase in person using a retailer-generated barcode, doesn’t have a ready solution for consumers trying to pay with cash at sandwich shops like New York’s Artiserie that only accept cards, but PayNearMe is seeing more demand from retailers expanding cash-payment options for customers shopping online.

That trend could accelerate as more brick-and-mortar stores close, according to PayNearMe CEO Danny Shader.

Payless ShoeSource, working through bankruptcy this year as it closes 2,100 U.S. stores, enlisted PayNearMe in 2018 to help move online merchandise for customers who could only pay with cash, Shader said.

“Payless customers could make their selections online with shipping options, choose 'cash' and go to a participating PayNearMe location to complete the transaction,” Shader said. “Commerce is not a key growth area for PayNearMe today, but we’re looking at new ways to leverage our technology and help businesses serve customers with any tender, including cash."

For PayNearMe, the changing retail landscape creates fresh growth opportunities for its network of 27,000 participating retail locations in the U.S. that include 7-Eleven, CVS and other outlets, Shader said.

Auto-parts retailer RockAuto.com partnered with PayNearMe two years ago to sell merchandise to consumers who prefer to pay in cash.

Madison, Wis.-based RockAuto directs consumers who want to pay with cash to select “retail” payment when checking out. Shoppers receive a bar code generated by PayNearMe enabling them to pay with cash at a nearby 7-Eleven, Casey’s General Store or Ace Cash Express, to immediately complete the purchase.

Greyhound Bus Lines and Wish.com have also integrated with PayNearMe for customers who want to pay in cash for online purchases, according to Shader.

“We call it the post-order model, where consumers can shop online and as soon as they take cash into a participating PayNearMe outlet, the transaction is complete,” Shader said.

E-commerce currently is a small niche for PayNearMe. But the company, a unit of Handle Financial, is alert to opportunities that could include companies looking to accept cash payments for online sales, Shader said.

Cash-centric consumers are also getting emboldened by cities and states pushing back against cashless stores with proposals to mandate cash acceptance.

“I think eventually commerce will grow for us, because the shift to online commerce continues even though many consumers still prefer to pay with cash,” Shader said.

PayNearMe—which launched in 2009 during the last major economic downturn—serves a broad spectrum of consumers, and the company’s research suggests payment preferences are not set in stone.

“Consumers with bank accounts often prefer to pay in cash, and a customer that paid with cash this month might pay with a card next month. The one thing we’ve learned is that consumers like to have a full range of payment options, and our system addresses that for all types of retail channels,” Shader said.

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