Online Resources Corp. is linking its network to those of money-services businesses to attract the unbanked and expand its expedited bill payment system.
The Chantilly, Va., vendor announced an agreement Monday to offer bill payment services through Ace Cash Express Inc., an Irving, Tex., provider of walk-in payment services.
This is one of four such deals Online Resources has reached to date but the first in which its partner has been made public.
Robert R. Craig, Online Resources' executive vice president and general manager of e-commerce services, said the initial goal is to foster bill payments by people it cannot reach through its bank clients.
"Ace certainly represents a great partner for us in helping manage the extension of our biller network into consumer-facing storefronts for the primarily underbanked," he said.
The deal, which went into effect last month, allows Ace's customers to send payments to the billers in Online Resources' network, including the 400 to 500 that can accept same-day payments.
"There's a larger market for expedited payments in the online space" than in the walk-in market, because there are more people paying their bills online, but many go to walk-in centers if they have to make a last-minute payment, Mr. Craig said. "There's an overlap."
The second phase of the partnership with Ace, which may take effect this year, is to link Ace's billers with Online Resources' network, he said.
Ace also provides check cashing, payday loans, and other financial products and services.
Online Resources began offering its expedited service in April 2006. Its first bank client did not go live until the following year. Standard bill payment services are generally free to consumers, but many bankers say people will pay a fee to make a last-minute payment that enables them to avoid a late fee.
Mr. Craig said he has no specific goals for the volume increase he anticipates from the deals with Ace and the other walk-in providers, which decide how to start offering the services and how to promote them. Consumers will not notice any difference between payments to billers connected to Online Resources' network and payments to those affiliated with the walk-in providers, he said.
Jennifer Roth, a senior analyst with the global payments practice at TowerGroup Inc., a Needham, Mass., independent research firm owned by MasterCard Inc., said faster payments are more important for the walk-in providers than the online ones.
"With the walk-in bill payment business, when consumers go in to make a payment … in many cases they are expecting their utility to be shut off," or they have some other urgent need to make an immediate payment, Ms. Roth said.
"I see a big benefit for Online Resources" from working with walk-in providers, since it can use these relationships to increase its roster of billers that accept real-time payments, Ms. Roth said.
Online Resources is not the first payment provider to move into the walk-in market to reach the unbanked.
Fiserv Corp.'s CheckFree Corp. owns the CheckFreePay walk-in operation, which she called a "much larger provider" of such services than Ace. "CheckFree's one of the top three," along with Western Union Co. and MoneyGram International Inc.
There is significant growth potential in this market, according to Ms. Roth.
Online Resources can work with many smaller walk-in providers to expand its reach and build more biller connections, she said, and walk-in providers likely will be eager to work with Online Resources, because such agreements can help them expand their roster of billers and cut their operating costs.
