US cash payment service PayNearMe has received another $16 million in funding (The company previously raised $6.3 million in funding) and is launching a new mobile payment option, aimed at those who don’t or can’t get access to banks.
The PayNearMe system is directed at consumers who don’t have access to credit cards and banks, but who do have mobiles and access to cash. The system lets users pay cash for online goods and services, by allowing the users to pay at shops (currently PayNearMe has a deal with 6,000 7-Eleven stores in the US) via a special PayNearMe card.
PayNearMe’s service lets users make online purchases simply by providing their phone number to an online retailer. The user then takes a PayNearMe card replies to a text message sent by the service with the card’s unique identification number, and hands the correct money and the card over to the 7-Eleven cashier. Once the 7-Eleven systems receive the amount the online retailer can then send the goods or allow the user to access the service.
PayNearMe – whose catch phrase is “No credit card? No problem!” says that 54% of adults in the US would rather pay for purchases using cash, and 24% of US households don’t have access to credit cards or bank accounts.
It remains to be seen if this will be successful, there’s definitely a big market for it in the US, and the market for this in rest of the World is potentially enormous, hence the large sums being invested. However for online retailers it’s a no-brainer as the payee is notified immediately that payment has been received with no risk of fraud, charge-backs or frozen funds.
And for the end-user unlike gift or pre-paid cards, which store value and are typically in fixed amounts (or denominations), PayNearMe Cards enable mobile cash payments in any amount from $.01 to $1,000. There’s no stored value, no hidden fees, no unused balances, and no need– or even ability — to pay more than the consumer intended to spend.
“By creating mobile cash payments with the free PayNearMe Card, we’re making it even easier for consumers to make payments with cash,” said Danny Shader, CEO of PayNearMe. “Now, businesses that accept PayNearMe can serve the large and growing population of consumers who prefer cash and want to use their mobile phones.”[ad name=”Google Text half banner advert “]