Cash transaction provider PayNearMe is among the growing list of payment companies that are anxiously awaiting the higher volume of transactions that will result from the Affordable Care Act.

"These health care companies are going to be looking for ways to accept payments, and we already have the user experience and network of locations to accept transactions," says Danny Shader, CEO of PayNearMe, which just received a $20 million round of financing led by GSV Capital, with August Capital, Kholsa Ventures, Maveron and True Ventures also participating.

PayNearMe will use the investment to expand in its existing lines of business, which include payments for bills, rent, loans, tickets, utilities and online purchases. It will also launch into new markets such as health care.

Payments companies are paying close attention to the Affordable Care Act, which will likely create a need for millions of consumers to make payments for premiums and other medical care. Self-directed health care plans such as health savings accounts are also becoming more widespread, increasing consumers' responsibility and need to handle their own health care payments.

Many payment companies are using mobile and online payment technologies to target the health care market. Algeus has released a mobile app and works with corporate payment company Wex to provide a virtual card for health care claims. And PaySpan has released a single card to combine payments with other card-related functions such as identity management and wellness incentives.

PayNearMe also targets consumers directly. It provides a payment slip with a printed bar code that consumers bring to stores that are part of the company's network. The store accepts the slip and the cash payment on behalf of PayNearMe. PayNearMe then notifies its merchant client that the funds have been accepted.

PayNearMe has been expanding the locations that accept cash payments for it. It works with 7-Eleven and this week added Family Dollar stores to its network.

In all, this gives PayNearMe 8,000 more locations where it can accept cash, with a total network of 17,000 locations. "It expands our footprint dramatically, it really is a game changer for us, and it allows us to serve a [broader range] of payees," Shader says.

The company also recently introduced a self-service option for merchants, and it launched a mobile service in 2012.

Health care providers will want some flexibility in how they accept payments, says Michael Trilli, a health care analyst for Aite Group.

"A lot of the plans on the [Affordable Care Act exchanges] are higher-deductible plans, which will place more pressure on the consumer to make payments," Trilli says. "More consumers will need more outlets to pay and more payment channels will open up."

The need for a variety of payment options also means there's no clear winner among payment models in the health care market as of yet, Trilli says, adding there will be a mix of mobile, Web and other technologies.

PayNearMe is diversifying as it faces more competition for cash payments at retail stores. Walmart offers an in-store cash payment service and eBay's PayPal offers both a reload card and an integration with Coinstar kiosks as methods for loading funds to PayPal accounts with cash.

In addition to health care, PayNearMe is negotiating with companies in the auto insurance, self-storage, direct selling, financial services air travel, child support and online entertainment industries, Shader says. PayNearMe already accepts payments for auto lending through software from Shaw Systems, Megasys and Nortridge Software.

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