PayNearMe, a cash payment system that lets users pay for online purchases, bills and bus tickets at 7-Eleven stores, now offers a fully mobile payment option. Users who don’t have a credit or debit card can complete purchases without having to print out anything or use a card in-store.
Here’s how it works: When a user buys something on line, whether from a PC or smartphone, a merchant can offer the option of paying with PayNearMe (see full disclosure below)with cash instead of a credit card. The user can choose to pay at a 7-Eleven store or other retail partners in the future. When they go to pay at the store, they can now call up a link to a payment screen that displays a barcode for the transaction. The 7-Eleven employee can scan the barcode and accept the payment and the money goes directly back to the original merchant, who completes the purchase. The customer gets a receipt, which can be used for proof of purchase in some cases. You can see what the process looks like with this simulator.
No more printouts
Previously, PayNearMe required users to print out a payment slip that they took to a 7-Eleven. Or they had to get a card in the store to complete a transaction. Now, users can just use their smartphones to make a purchase with cash without having to use any additional tools.
This is not for the 75 percent of people who have access to a credit or debit card. But there’s a quarter of the population that is underbanked or can’t get access to cards for financial reasons or because they’re too young. PayNearMe has been an option for those users and for merchants who want to reach that audience. Greyhound and Progreso Financiero, a financial service that makes loans to immigrants, will be among the first companies to offer fully mobile payments with PayNearMe.
Greyhound, which previously utilized PayNearMe’s card payment system, has already started using the mobile option and has seen a high volume of mobile transactions, averaging more than 20 percent of its PayNearMe cash payments. PayNearMe will likely see more of its business move over to the mobile option.
Cash market fuels growth
PayNearMe has been growing by more than 30 percent each month since launching 16 months ago. The company is poised to keep growing and is looking at opportunities in online gaming and other digital content purchases. It’s also looking at expanding the number of retailers that can accept payments. I think PayNearMe is tapping an important market and I like the way it uses 7-Eleven’s network of more than 6,000 stores in the U.S. as a platform to receive payments. Cash is not going away anytime soon and smartphones are only growing in adoption. It makes sense to give this sizable group of cash buyers a more mobile way to pay for things.
Disclosure: PayNearMe is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.