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For a large percentage of the U.S. population, cash payments are still king — either by necessity or choice.
So while a lot of payments-industry innovation is focused on substituting plastic cards with our phones, a startup called PayNearMe, which just landed a $20 million round of financing, is concentrating on what it believes is a bigger problem. It is aiming to make cash an easier payment method for transactions you wouldn’t think possible.
It does this by letting people pay in cash for items such as their rent bills, water bills or Greyhound tickets. On one end, it provides Greyhound or local municipalities with the technology to integrate with the PayNearMe cash network. Those entities either mail PayNearMe cards to consumers or provide them with PayNearMe slips they can print out themselves or display on their phone. Those customers then take the cards or slips to partner retail stores near them to pay for their bills or tickets in cash.
Until this week, customers looking to pay using this service could make cash payments at 7-Eleven or ACE Cash Express stores. Now, PayNearMe has signed a deal with Family Dollar to bring PayNearMe cash payments to its more than 7,000 discount stores.
“We now think we have the best footprint in the country,” CEO Danny Shader said. “But it’s not places like liquor stores; it’s well-lit establishments.”
“Ultimately as this thing continues to grow and is begun to be more widely used, we may even have to get more dense,” said Bill Campbell, the former Intuit CEO and Apple exec who advises PayNearMe. “But Family Dollar is a big deal; a lot of areas we weren’t in, we’re in now.”
PayNearMe’s retail partners get paid to participate and also see potential sales upside from more foot traffic.
PayNearMe’s new $20 million round of financing brings the total funding to more than $50 million. GSV Capital led the round. August Capital, Khosla Ventures, Maveron and True Ventures also participated.
The money will help the company, which isn’t profitable, go after new types of categories for cash payments, Shader said. One of these target categories is e-commerce; the company recently hired an exec to go after that market.
“Common sense would tell you e-commerce should be the biggest part of the business,” Shader said. “Time will tell if that’s true. But we could be a huge public company without an ounce of e-commerce.”