In its quest to rise above the fray in alternative payments, Obopay has identified another financial-services niche ripe for modernization: business-to-consumer payments.
Obopay sees opportunity in persuading corporations that rely heavily on paper checks for disbursements to customers to electronify those payments, says David Schwartz, the company’s vice president of product and corporate marketing.
"Consumers usually prefer getting paid directly to their debit card account when they're given a choice because it's fastest, and when you give out prepaid cards it generates a lot of questions about where to use it and what to do about unspent funds left on the cards, which slows things down for companies," he says.
Corporate disbursements, which account for a splinter of the total payments pie, have not seen much action from alternative payments, analysts say.
Removing costly checks from corporate disbursements could be a boon to companies, says Gwenn Bezard, research director at Aite Group.
"Obopay continues to pursue various niches and this one has some promise," he says.
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