A week after making Discover the first credit card offered in its mobile bill-pay service, PreCash Inc. has already seen a spike in the use of Evolve Money, which previously accepted only debit cards.
The addition of credit cards marks a change for Houston-based PreCash, which provides Evolve Money as a consolidated bill-paying service that mostly targets big-city markets in the U.S.
PreCash launched Evolve Money as an option for unbanked or underserved consumers to consolidate their bill payments through one application, said Blair Jeffrey, senior vice president of sales and business development for Evolve.
Debit is similar to using a bank account, Jeffrey said. The underserved consumer who uses mostly cash also views debit as similar to using cash, especially with a prepaid card, Jeffrey added.
But PreCash has had a six-year relationship with Discover, making it easy to choose that card brand to dip its toe into the water of accepting credit card payments.
"Credit was something that was being pushed by our clientele and we wanted to put something in place that would allow free use of a credit card," Jeffrey said. "Consumers want credit cards either for the extra time to pay a bill, or for the rewards or loyalty programs."
PreCash wants to add Visa and MasterCard to Evolve Money in the near future, Jeffrey said.
The Evolve Money app works on Android and Apple mobile devices, as well as desktop or laptop computers, supporting bill payments to more than 12,000 billers. PreCash operates as the merchant of record, so even if a biller doesn't accept Discover cards, the Evolve Money user can still pay with Discover through Evolve.
"We see it as a replacement for a mobile bank app, or someone who goes to each individual biller to make a payment," Jeffrey said. "We have a lot of speed that banking apps don't, and the single app allows bill payments in one place. It's one app and one card."
While mobile has the potential to make bill paying easier, PreCash faces the same challenge any provider might in getting consumer adoption, said Thad Peterson, senior analyst with Boston-based Aite Group.
"The challenge is in how simple you make it," Peterson said. "Bill payment is not like buying something at the point of sale. A lot of information goes back and forth between the consumer and the business, with a relatively high risk of error."
In addition, the underserved market "generally doesn't have the luxury of time" to try to figure out mobile apps, so the value proposition has to be clear in order to change their behavior, Peterson added.
Evolve Money provides benefits that consumers will notice immediately, Jeffrey said. If an Evolve Money user has a payment card compromised through other transactions, they only have to change to another card through Evolve, not all of the businesses to which they pay bills.
Plus, PreCash makes money off each transaction through a settlement fee with each biller. The consumer uses Evolve Money as a free service.
PreCash will be watching Apple Pay closely, Jeffrey said. "Apple would be very vital to us if they were to consume bill pay as a content source," he added.
Both PayPal and Apple are likely to move beyond their primary uses for retail payments, Jeffrey said. "Once they both conquer retail, we see similar decisions to move into bill pay."
Other companies are deploying different technology to address mobile bill paying. Mitek Systems debuted a system nearly a year ago called Mobile Photo Payments, targeting consumers who prefer to pay bills with their phones. The system allows consumers to scan bills with smartphone or tablet cameras to initiate a payment.
And last week, Mozido and MasterCard launched a partnership that expands MasterCard's goal of replacing cash with prepaid cards in areas around the world for unbanked consumers.
Many companies are seeking to provide mobile pay options to the underserved market, though Evolve Money would appeal to most consumers, especially millennials just learning how to manage bill payments, Jeffrey said.
"The key for us is hitting our market segments by just concentrating on bill pay," Jeffrey added. "Fifty percent of consumer spend is on bill payments, so we have a decent shot at this."