An alternative payments company that lets users make electronic payments in cash is planning to quickly expand its user base and merchant clients with the addition of a mobile channel.

PayNearMe Inc. allows consumers to make cash payments electronically and online by presenting a printed bar code or a card at 7-Eleven stores. PayNearMe also allows businesses to reject payments to avoid charge-backs and other problems if, for example, the merchant doesn't have an ordered item in stock

PayNearMe Inc. has contracts with nearly 100 billers, which in turn represent thousands of other billers, such as auto lenders and collection agencies. In mid-February, PayNearMe plans to launch a mobile version of its system with Progreso Financiero (Progress Financial Corp.).

"It will be the first mobile cash-payment application," says Danny Shader, PayNearMe's CEO, noting the company is adding the mobile function to accommodate the rising number of consumers who have smartphones. "The cash audience increasingly is carrying these devices."

Progreso will send a bar code to individuals' smartphones using a text message. 7-Eleven's clerks would scan the bar code after to complete the payment after receiving users' cash, Shader says. Progreso, of Menlo Park, Calif., helps Hispanic consumers build credit in the United States and gain access to mainstream financial services.

Next week, AMS Billing Services is expected to announce its support for PayNearMe's payment services, which will enable consumers to go to any of the 6,200 7-Eleven locations to make utility payments individually under their apartment complex's pooled utility account, Shader says.

"AMS is a big player in that space," he says.

PayNearMe's current clients include Greyhound Lines Inc. Tickets dispensed to PayNearMe users online or at a 7-Eleven store contain bar codes used for boarding a Greyhound bus.

Conversations are under way with other travel and ticketing agents to solicit their participation in PayNearMe, Shader says. He declined to disclose PayNearMe's transaction or sales volume data.

PayNearMe launched a bill-payment function for its cash-payment system that works with bar codes printed on billers' statements last May. Ria Financial Services Inc., a unit of Euronet Worldwide Inc., handles the payments as wire transfers and automated clearinghouse transactions.

Consumers also may buy Ria cards containing a magnetic stripe that mimics the bar code data at 7-Eleven convenience stores.

PayNearMe charges billers a standard fee of $2.99 for cash payments up to $300, $3.99 for payments ranging from $300 to $500, and $4.99 for payments up to $1,000. Each payee decides whether to pass along these charges to consumers. Some companies, such as collection agencies, might assume the cost just to get the consumer to pay back a debt, Shader says.

For ecommerce, PayNearMe charges merchants an "embedded" rate similar to traditional card interchange, Shader says, noting rates vary based on category, average selling price and other factors.

Some companies, such as collection agencies, issue consumers a card to use to pay off their debts when providing cash to a 7-Eleven clerk. The individual's receipt includes an up-to-date statement noting how much they owe, Shader says.

PayNearMe by the end of March expects to announce another provider with "a couple thousand" locations where consumers may initiate cash transactions using its service, Shader says. "You'll see other stuff behind that announcement," he adds, declining to provide specifics.

In a few months, PayNearMe also expects to announce a partnership with a tolling authority that will enable consumers to post-pay their tolls, Shader says, declining to name the authority. The authority captures vehicle license-plate images to determine when to charge users of its bridges, he says.

PayNearMe has been conducting tests in a wide variety of places including auto lenders, providers of transportation and financial services, landlords, utilities, ecommerce and entertainment ticketing, Shader says.

Branchless banks also might see PayNearMe as a potential partner. "We can make 7-Elevens look like branches" for deposits and withdrawals "because there's an ATM there already," Shader says.

Shader says he has not looked into the regulatory issues that might come up with such an arrangement. However: "Technically it's feasible," he says. "The (mobile) applications are unlimited."