Payments servicing provider Nortridge is integrating with PayNearMe's electronic cash transaction network to enable borrowers to make payments at 7-Eleven and ACE Cash Express stores, thus reducing the risk lenders would face in in accepting cash payments at their own locations.
"The idea is to have someone else handle the cash," says Mark Gleason, director of business development at Nortridge Software. "And these stores are open 24 hours a day, so people can pay anytime. There's no trip to the bank and there's nobody handling cash at the lender."
Nortridge's clients offer auto loans, jewelry store credit and other products for a consumer base that's largely unbanked.
"The lenders include a lot of subprime lenders and payday type lenders and small consumer loans. They're increasingly reluctant to handle cash. They don't want to take payments through a bulletproof case or take crumpled up money for payments," Gleason says.
For PayNearMe, auto loans are a natural fit for its primary business, which allows consumers to pay rent and utility bills at convenience store locations.
"The retail locations that any lender has may be limited, so this gives consumers a number of locations where they can pay," says Kunal Kumar, vice president of business development for PayNearMe.
The partnership enables Nortridge customers to send PayNearMe bar codes and payment instructions as emails or text messages to borrowers. To make cash payments, borrowers bring the bar code to a local 7-Eleven or ACE Cash Express store and pay at the register. Lenders instantly receive notifications of the payments, and borrowers' accounts are updated automatically. The payment process takes less than a minute to complete.
While the borrowers are high-risk, lenders incur internal risks as well when accepting cash payments on their own, given the location of many of the lender's businesses and the fast-changing staff, Gleason says.
"The employees are transitory, and it's not a glamour job. So having a lot of cash on hand can be a bad thing," Gleason says.
Since the convenience stores are more accustomed to handing cash transactions, they are more likely to be comfortable accepting payments for subprime loans, Gleason says. "They're getting paid to handle the cash, and it's really simple for them."
Nortridge's integration with PayNearMe is built on XML, a common Web language that will make it easier for Nortridge and PayNearMe to add new features and functions quickly with flexible formats for data exchange, Gleason says. The system includes workflow tools that enable the lenders to track payments, he says.
PayNearMe has also recently added technology that Nortridge's users can access. PayNearMe launched the PayNearMe Express self-service system 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 also has a mobile app.