Fidelity Express, a money-transmitting unit of the Sulphur Springs, Tex., grocery wholesaler GSC Enterprises Inc., is planning to offer a mobile bill-payment service to utilities and other billers that use its walk-in payment agents.
Terry L. Hair, the national marketing manager at Fidelity Express, said in an interview Monday that its XPressPay Mobile service uses PayCash Mobile technology from Cyphermint Inc. of Marlborough, Mass., and is aimed primarily at the unbanked and underbanked.
People of all economic classes are using mobile devices for messaging and increasingly for Internet access, Mr. Hair said. "We see that as the major payment system of the future."
Fidelity Express and Cyphermint announced the service's availability Monday and are displaying the technology this week at the Joint Payment Center Conference in Charlotte for water and gas utilities, electric cooperatives, municipalities, and other billers.
The announcement followed a 60-day internal test by Fidelity Express employees, Mr. Hair said. "We are now ready to launch."
Fidelity Express is licensed as a money transmitter in 26 states, mostly in the Sun Belt. It has contract agents in 5,300 locations, such as convenience and phone stores, video rental shops, and check cashers, and it offers money orders, credit card processing, and in-person bill payment at 3,400 of those outlets, Mr. Hair said.
The company processes 1 million payments a month, 80% of them under contracts with utilities. It has contracts with 80 billers, including utilities, electric cooperatives, and municipal water departments, and it offers access to 250 or 300 additional billers through relationships with concentrators such as MasterCard Inc., he said.
Fidelity Express plans to charge consumers a $1.50 "convenience fee" for each bill payment made through the mobile service, Mr. Hair said. Its customers pay $1 to $1.50 at walk-in locations.
Cyphermint started offering its PayCash Mobile technology in February. It was based on the PayCash e-commerce system, which Cyphermint began offering in 2000.
Dennis Bache, Cyphermint's director of sales, said it spent a year and a half customizing PayCash for use on mobile devices. The original system was designed to help the unbanked shop online by making payments from a prefunded account, he said. "That doesn't make sense on a mobile phone."
The agreement with Fidelity Express is Cyphermint's first private-label one for the mobile technology, Mr. Bache said.
The money transfer company's relationships with utilities should help to promote adoption of the new service, he said. "Their billers are interested in promoting this solution to their consumers."
Any individual consumer probably would sign up with no more than five or 10 billers, either using a mobile device or PayCash's Web site to set up accounts, Mr. Bache said, but "there are hundreds of billers you could potentially pay."
The PayCash system, which works with both text messaging and the Web browsers built into mobile devices, also enables person-to-person money transfers within the Cyphermint network, international remittances, and top-ups of prepaid phone accounts, and it can be linked to a physical prepaid debit card, though those offerings are not part of Fidelity Express, he said.
In addition to its Internet and mobile payment offerings, Cyphermint has a kiosk service that lets customers add money to virtual stored-value accounts using Vcom machines, Mr. Bache said.
Bob Egan, the director of the emerging technologies practice at TowerGroup, a Needham, Mass., independent research group owned by MasterCard Inc., predicted a virtual explosion this quarter of announcements such as this one and one Monday by Verizon Communications Inc. that it would preload on its handsets a mobile banking application developed by Firethorn Holdings LLC.
"Mobility meets common sense. We're finally seeing some adult applications for cell phones, and they're banking and payments," Mr. Egan said.
Mobile communications are more widespread than banks, he said. "If you can address the gap between those people who are unbanked and those people who have cell phones, there's money to be made at that. Electronifying the unbanked into the payments world is a very interesting economic opportunity."
Reloadable, prepaid debit cards and payment services such as Fidelity Express' are a new way to address a population that historically has not participated in mainstream finance, Mr. Egan said, and they offer a revenue opportunity for providers.
"It will become more commodity-like. The fees will come down," he said. "It also provides the opportunity to convert some of these folks from unbanked to banked."
