September 1, 2013
What's common between Amazon, Sochitel UK, Greyhound, 7-Eleven, Ria Financial Services and Khosla Ventures is a startup called PayNearMe found in 2011 by Danny Shader.
Mobile Financial Services innovation is at its peak right now. Everything from how we pay our utility bills or buy a coffee at our favorite coffee store downtown. The transformation is mostly from a cash based transaction to a cashless transaction. In this phase of cashless transformation there is still an estimated 25% of the American population who do not have either debit cards or credit cards.
PayNearMe (previously Kwedit) based in California allows its users to pay or receive cash through payment outlets setup in the neighborhood. PayNearMe has partnered with 7-Eleven and Ria Financial Services to pay and wire funds through cash. Through PayNearMe’s services a user can make travel reservations, shop online or pay bills. All this can be done by walking in to any of the 50,000 7-Eleven outlets across USA. PayNearMe also has business partnerships lined up with Amazon, Greyhound and Sochitel UK. PayNearMe’s business concept gives a direct competition to established companies like Western Union.
The business idea behind PayNearMe’s unique service offering came through when Facebook users who collected virtual currency through playing games could redeem cash at any 7-Eleven outlets. The company saw a larger potential and rolled out its cash payment service to include online and offline shopping.
Over 3000 billers are associated with PayNearMe. Bills carry a bar-code and a 7-Eleven logo at the bottom. User’s take the bill/s and get it scanned at the counter at one of the 7-Eleven outlets and makes the payment to the cashier. The money automatically gets remitted to the biller. User’s who do not own any debit or credit cards can avoid long queues and will also cut down the travel time to make cash based payments.
LTP View: PayNearMe’s operations might appear to be traditional, involving brick and mortar retail but it is a useful service for unbanked and under-banked. It is a connect between offline and online work and this out of the box thinking helped it in getting funded from Khosla Ventures. In late 2011, PayNearMe was successful in raising $16 Million which was followed up in early 2013 with a $10 Million funding.