By ari Levy
(This story was corrected to show that Facebook is no longer a partner of PayNearMe).
For the 25 percent of Americans who do not have a credit or debit cards, a PayNearMe startup called wants to pay utility bills or transferring money as easy as buying a Slurpee at 7-Eleven (says 3382: JP).
PayNearMe, based in Mountain View, California, announced a partnership on Tuesday, may 10, with 7-Eleven and Ria financial services to consumers pay accounts and wire funds with cash late — with lower rates than applies to Western Union (WU) transfers.
U.S. consumers used cash of approximately $ 1.2 trillion in purchases last year, according to research firm is group. Still, Americans without bank cards face hassles trying to pay bills, shop online, or travel reservations. PayNearMe of technology can be used to buy everything from bus and concert tickets booking online on Amazon.com (AMZN) by walking to the nearest 7-Eleven store.
"The ' underbanked ' is a huge underserved market," says Danny Shader, who founded PayNearMe in 2009 after the sale of his previous companies to Motorola (MMI) and Amazon. "We make it better, faster and cheaper for them to act."
Amazon.com is already working with PayNearMe, which also announced partnerships on Tuesday, 10 may, with travel company Greyhound lines (FGP: LN) and with Sochitel UK, which consumers minutes add to prepaid phone plans.
Shading started the company with the name Kwedit and the Mission of helping players of Facebook games buy virtual currency with cash by printing receipts and taking them to 7-Eleven. He soon discovered that there are more question of more traditional offline merchants. He changed the name in PayNearMe last year and has worked with 7-Eleven to attract such industries such as entertainment and financial services. The company is no longer works with Facebook.
khosla Ventures led a $ 16 million to invest in PayNearMe in November, partly to help the company to expand its roster of merchants. Other investors are August Capital, Where Venturesand Lotus Development founder Mitch Kapor.
"There is not a company on this planet that would not appreciate 25 percent more market," said David Hornik, a partner at August capital in Menlo Park, Calif., who has invested in payment startups for a decade. "The great opportunity for a set of transactions that no one else has enabled."
Work for the company, it must process hundreds of millions — if not billions of dollars in transactions per year, because PayNearMe only a small cut of each lasts, shading said. The amount varies by type of product and the customer. Sometimes the cost is absorbed by the dealer and other times by the consumer, said Shader, which does not provide specific information.
The consumer cost for sending invoices and wire money using PayNearMe is cheaper than that for money orders or transfers via Western Union, he said. RIA Financial, a unit of Leawood (can)-based Euronet Worldwide (DO), will handle money transfers, bill payment services on behalf of the PayNearMe.
PayNearMe faced with competition from green point (GDOT) and Netspend Holdings (NTSP), which offer reloadable prepaid cards that consumers in supermarkets and convenience stores can buy. Both companies held IPO last year.
Shading says the ability to pay bills, is the biggest advantage of the PayNearMe. Some 3,000 billers have signed to use the system, he says. The accounts will be a 7-Eleven logo at the bottom, next to a bar code with directions on how to pay with cash. Customers can take of the invoice to a shop, the checker bar code scanning, and then the payment. The money is automatically transferred to the biller through payment network that PayNearMe built.
The same is true for merchandise purchased online from Amazon.com and bus tickets of Greyhound. Instead of to the local drive, waiting in line, and chancing that might be overbooked the bus, travellers can book a trip online, print a PayNearMe slip and take it to 7-Eleven. There, they pay in cash and use the receipt if the bus ticket.
"PayNearMe will eventually allow us to add thousands of ticketing locations, so that our customers easy cards any time of the day can get," said Dave Leach, chief executive officer of Dallas-based Greyhound, in a statement.
Levy is a reporter for Bloomberg News.
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