The eBillme payment service now allows people to pay for online purchases at walk-in locations, inviting the unbanked to use a system that until now has targeted online banking customers.
ModaSolutions Corp., the Rye Brook, N.Y., company that offers the eBillme service, said that its system has long appealed to people who trust their banks more than they trust online merchants with their payment details. In its original form, the service let merchants bill customers and receive payments through banks' online bill-pay systems.
Since the unbanked have a similar trust relationship with the location where they pay their bills in person, tapping into that community can help improve sales for eBillme merchants, ModaSolutions said.
The unbanked are "a segment that is underserved and the merchants are very interested in that segment. It's new business for them," Marwan Forzley, Moda's president and chief executive, said in an interview last week.
Moda is working with providers such as MoneyGram International Inc., IPP of America Inc. and PreCash Inc., to make its new service available at 75,000 agent locations.
The unbanked already go to these agents to pay other bills. "These guys have a relationship with their walk-in providers. That's the way they do things and they'll continue doing it," he said. To them, "eBillme is just like any other bill you pay."
This new option does not require any change on the merchant's end, he said. A shopper would choose eBillme as usual, and then be presented with the choice to pay with cash or to pay through online banking. Shoppers who choose to pay with cash are asked for a ZIP code so Moda can suggest nearby walk-in payment locations.
In addition to promotions on merchant Web sites, some of the agents that accept eBillme payments also will promote the new service, Forzley said.
Though there are methods such as prepaid cards that allow the unbanked to make purchases online, eBillme offers benefits, such as 1% cash back and buyer protection, that might encourage the unbanked to choose eBillme over other alternatives, Forzley said.
Bruce Cundiff, a director of payments research and consulting for Javelin Strategy and Research, said walk-in payments are a natural extension of Moda's service.
"eBillme's brand is based on bill payment, so there is an online component to that and there is a walk-in/walk-up component to that … They always talk about themselves as a cash-based alternative. This is truly a cash-based alternative," Cundiff said.
Moda still likely would get most of its business from those who pay through online banking sites, he said. The walk-in option "is certainly not going to be the vast majority of eBillme volume, but it could give a nice bump to eBillme."
Cundiff said prepaid cards are "the primary competitive method of payment" to eBillme's walk-in service, but not all unbanked consumers use them. Indeed, there may be situations where even prepaid card users would prefer eBillme's system, he said.
For example, a consumer that wants to make a purchase but does not have enough funds on a prepaid card could initiate the transaction online through eBillme, Cundiff said. It appeals to "those that may not have a bank account and that still want to impulse buy," he said.
Aaron McPherson, a research manager for payments at IDC Financial Insights, said the walk-in feature should increase the appeal of Moda's service.
Though the walk-in feature's audience may not pay any of its bills online, he said, they still have to have some degree of tech savvy to want to use eBillme.
Even so, "this definitely fills one of the gaps," he said. It "looks to me like a really great add-on to the service."