Payment-technology provider Fuze Network Inc. believes it has an answer for consumers who would prefer to use cash to pay their credit card bills: use the credit card.
Targeting consumers who may not have a checking account, the Salt Lake City-based payments company announced Sept. 21 the availability of Swipe2Pay, which enables retailers and bill-payment centers to use their point-of-sale terminals to accept cash payments of card bills.
If a retailer can save processing time and fees by convincing a customer to open a store-branded credit card or obtain a store rewards card, Fuze felt billers and retailers would be interested in similar time and money savings by creating a way for their POS terminals to accept cash payments from customers paying their store card bills, Dave Wilkes, Fuze chairman and chief executive, tells PaymentsSource.
“Our background in bill paying made us familiar with all of the problems walk-in payments create in paperwork at the payment center and for the card issuers in not being able to accept cash,” Wilkes says.
A request to pay off a credit card balance with cash at a payment center or retail store historically has been a tedious process in which the customer must fill out several forms at the bill-payment location, Taylor Edwards, Fuze director of business and development, tells PaymentsSource.
With Swipe2Pay, a customer using cash to pay a credit card bill would go to a payment center, a retailer’s service desk or to the point of sale, swipe the card on which they want to make a payment, and key in the amount paid, Edwards says. The paying customer then gives that amount in cash to the clerk, who applies it to the card account. The payment center or store transfers the funds to Fuze, which settles the account with the card issuer, Edwards explains.
Depending on their arrangement, Fuze and the merchant each receive a portion, of a $3 processing fee the customer pays for a Swipe2Pay transaction, Edwards adds.
The merchant or payment center does not need special software or hardware because Fuze connects to their payment network, Edwards says.
Some utility companies also can request Fuze’s BillPay cards, which will be bear the company’s name. Consumers could use the cards in the Swipe2Pay process to pay their utility bills, for example, Edwards says.
Fuze has 50,000 BillPay cards in circulation, which utility companies tend to request because their customers sometimes prefer to pay with cash, Edwards explained.
Fuze continues to add acceptance locations, with an announcement expected this week that Ace Cash Express Inc. will provide the service at its 1,700 locations nationwide, the company said.
One industry analyst agrees Swipe2Pay fills a market need but says it is difficult to predict whether it will take hold.
“There is a segment that clearly needs those services, and this fills more of a unique need,” Scott Strumello, an associate with New York-based Aite Consulting Group, tells PaymentsSource.
The interest rates on checking or saving accounts make many consumers feel it is not worth establishing those accounts and they just keep cash available instead, but traditional banking provides connection to a much larger payment arena, Strumello contends.
“I don’t think we are reverting back to the old days of cash under the mattress,” Strumello adds. “But this is an interesting concept, and the card issuer is the biggest beneficiary of anything that makes it easier for certain customers to pay their bills.”
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