A New Jersey company has entered the electronic payments race, but with a different strategic twist: It wants to reach a segment of the population that has had limited access to conventional banking services.

The company, In-Person Payments Inc., has developed a system that lets people without checking accounts pay bills at stores and check-cashing establishments.

IPP, through electronic links with merchants and the bank payment system, consolidates and processes the payments and transmits the information and funds to the billers.

"We're taking the unbanked and empowering them to use the banking services we all take for granted," said Marvin Morris, president of the Wayne, N.J.-based company. The "unbanked" is the estimated 20% of U.S. households that do not have checking accounts.

The network is currently operating in New York, New Jersey, eastern Pennsylvania, and Maryland. It has more than 400 participants, including utilities, cable companies, department stores, and municipalities.

IPP hopes the service will grow throughout the region and has plans to nationwide, said vice president Alex Cooper.

The company is attempting to work with banks involved in electronic benefits transfer, the electronic delivery of welfare payments and other public benefits. It also has shown interest in a relationship with the Financial Services Technology Consortium, a group of major banks, technology vendors, and research institutions that is exploring advanced payment technologies using the Internet.

IPP wants to be seen as an automated payment option for unbanked households. "In the inner cities and the areas we are concentrating on, the percentage is significantly higher" than 20%, said Mr. Morris.

People without checking accounts pay bills either by purchasing money orders and mailing the payments, paying in person at utility offices, or going to a local retailer, such as a pharmacy, that is authorized to collect payments for a particular utility.

IPP's service expands the latter concept by enabling a retailer to accept payments for a variety of vendors, including gas, electric, phone, and cable companies, and store credit cards.

IPP will set up agents in neighborhoods with high unbanked populations. These agents, which might be check cashers, pharmacies, or convenience stores, are equipped with a printer and a personal computer that includes IPP payment software and a modem.

When presented a bill and cash payment from a customer, an agent will enter the customer's account number and other data from the invoice. The customer will get a receipt that notes the account number, date, time, and location where the payment was made, as well as the fee for using the service. Customers are charged $1 for each payment made, a portion of which the retailer keeps.

The agent's computer automatically dials IPP's computer and transfers the payment information. IPP then transmits the data to the utility for credit to the customer's account.

The agent is also expected to deposit the collected payments into a local bank the next business day. IPP creates an electronic debit to move the funds into the vendors' banks.

The IPP service fills a definite payment-system niche, said William T. Gregor, senior vice president of Gemini Consulting in Morristown, N.J.

While many low-income consumers have access to so-called basic banking, or low-cost checking, accounts, as well as money orders, "some people just don't trust banks or anything other than cash," said Mr. Gregor. He added that such people would be likely candidates for an in-person electronic bill-payment service.

Mr. Cooper at In-Person Payments concurred that the company's customers tend to be "already disenfranchised and don't have relationships with banks, or have no banks in their areas."

IPP is currently processing 80,000 payments a month but says it has less than 1% of the potential market.

Volume has been growing by 7% a month, Mr. Morris said, adding that he is looking to get his numbers up into the millions.

To reach its goals, IPP is focusing on building the agent network, currently expanding at a rate of three retailers a day. One typical recent addition was David's Money Centers, one of New York's larger check-cashing establishments.

IPP is also attempting to broaden its services. This year, the company hopes to become a player in the rapidly growing electronic benefits transfer arena, which enables people to get public benefits through electronic means, such as automated teller machines and point of sale terminals.

"IPP can add value by providing a more accessible agent network in low- income areas, where ATMs are not prevalent," said Mr. Cooper. Customers would then be able to use their EBT cards at authorized merchants for obtaining money and paying bills, he said.

IPP said it has already built electronic benefits transfer capability into its system and is seeking to form relationships with leading processors of these payments, such as Citibank and Deluxe Data Systems.

IPP also has submitted a proposal to the Financial Services Technology Consortium to participate in an electronic check pilot. IPP wants to use that emerging technology as a method of transmitting payments from agent to vendor.

"As we grow, we see a need to look at different ways to move data and dollars faster and more cost effectively," said Mr. Morris. The consortium's technology "may be able to help us in our expansion."

The company also sees remote ticketing and home shopping as potential applications for its network.

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