SafetyPay wants consumers booking trips online to have the option to pay with cash.
The Miami Beach, Fla.-based company, whose online payment platform specializes in gaming, digital goods such as Facebook credits and travel plans to add cash as a payment option using ZipZap Inc.’s network, which includes 700,000 places to remit cash for online purchases.
The companies announced their deal on March 7 (
Extending the option to pay by cash for online purchases opens the door to customers who don’t have bank accounts or other established ways to pay electronically, says Zil Bareisis, a senior analyst for Celent. And it can be “an exciting way for both companies to unlock opportunities for further growth,” he says.
When at checkout while shopping online, the shopper picks the SafetyPay option, which seamlessly transitions to ZipZap. The shopper chooses a currency and ZipZap sends them a transaction code via a text message to their phone or to their computer screen for printing. The shopper enters a ZIP code so ZipZap can send them the locations of the nearest payment centers. The shopper takes the code to a payment center and pays the purchase amount after showing the code and their identification to a clerk.
ZipZap gets the payment confirmation from the outlet and notifies SafetyPay, which notifies the merchant of the payment so it may complete the transaction.
SafetyPay plans to target Latin America and Eastern Europe because of the low credit card distribution and use in those regions, Sandra Feinberg, the company’s vice president of sales, tells PaymentsSource.
Purchasing airline tickets in particular is troublesome for cash customers; there are no longer ticket outlets for them to visit because of the prevalence of online commerce, Feinberg says.
SafetyPay soon will announce two large airlines as merchant partners, she says.
“The high average value of the ticket is important, as is reaching an untapped marketplace,” Feinberg says. “Airlines are always trying to reach new consumers.”
ZipZap gets payment from the payment center the next business day, then settles with SafetyPay. ZipZap earns a percentage of the rate SafetyPay charges merchants per transaction, says Simon Nahnybida, ZipZap senior vice president of business development.
Feinberg would only say the rate SafetyPay charges merchants is less than that charged by credit card companies.
“The merchant will get the money in two to three business days from when the consumer makes the payment,” Nahnybida says.
Though developing countries are high on the list of markets for online cash-payment businesses, the U.S. is important as well, Nahnybida says. ZipZap’s payment outlets are concentrated in the U.S., Brazil and countries of the former Soviet bloc.
ZipZap’s contract with MoneyGram in the U.S. means ZipZap payment centers are in Walmart Stores Inc., CVS and Albertsons, among others. In Eastern Europe, ZipZap uses the CyberPlat network, and in Brazil it partners with Banco Rendimento.
“Twenty to thirty percent of the population in the U.S. doesn’t have a bank relationship,” Nahnybida says. “The demand may be perceived to be greater outside the U.S. and it probably is, but I think there’s a demand for it here.”
Though airline tickets are the headline item in the travel sector, any travel-related purchases are possible, Nahnybida says.
“We hope it’s bus tickets, train tickets, hotel reservations, vacation packages,” he says. “We hope SafetyPay is chasing all the travel businesses.”
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