Alternative payment methods are nothing new--PayPal revealed what kind of possibilities were in store for mobile and Web-based payments years ago. But these days, more startups are zeroing in on that segment of the population that pays exclusively in cash. A full quarter of all U.S. households don't have bank accounts or credit cards, which deflates most alternative payment platforms. That's a quarter of the population that could be shopping online, taking out loans, or paying their bills online. Another 43 million people in the U.S. have bank accounts but still prefer to pay with cash.
More startups are realizing that the cash-payment demographic a virtually untapped market (Visa and MasterCard are also getting in on the cash-payment platform with their prepaid, reloadable debit cards). Fuze Network is one such startup, and the payment technology platform announced Wednesday that it has raised $1.2 million in seed funding led by Metamorphic Ventures, Kickstart Seed Fund, and several angel investors.
The platform hosts a suite of solutions that focus on in-person payments and cash payments using pre-loaded accounts. The company's Where2Pay solution allows customers to find locations where they can pay their bills in person (an interesting solution to the problem of realizing that you're late on your phone bill and don't have time to wait for a mail-in or online payment to be processed). Additionally, Fuze's Where2Load platform helps customers locate the nearest place to reload their prepaid debit cards, and the company's Fuze Flow Platform allows users to either pay with cash in person or upload their banking information so that they can make payments immediately through Fuze.
The company said in a prepared statement that it enables customers to make payments at more than 17,000 banks and 100,000 retail locations nationwide.
"Our platform opens up new payment methods for millions of customers," said Fuze founder and CEO Dave Wilkes in a prepared statement. "Our recently introduced Cash Locator service presents all locally available payment networks (ATMs, banks, cash back merchants, load networks) in a single view for the consumer and reduces payment transaction costs up to 75%, using existing point of sale infrastructure."
Another cash payment solution, PayNearMe, allows consumers to pay with cash when making online and remote transactions by printing out a receipt for the transaction (or receiving the receipt on their phone) and taking it to their local 7-11, where they can pay the cashier, who acts as a sort of ATM for the business that will receive the money. The transaction is instant and complete the moment the consumer makes the in-person payment. PayNearMe CEO Danny Shader has pointed out that the solution isn't only for those who want to make e-commerce purchases, but those without bank accounts or credit cards who have loans to pay back. Additionally, the company serves those who have bank accounts but prefer the privacy of paying with cash.
Image source: Fuzenetwork.com