New Apps Reach the Millions of 'Unbanked'

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By Tobie Stanger

Greetings from Finovate Fall New York, an annual conference where financial software companies show off their new products, both for consumers and the business community.

Finovate has, over the years, introduced lots of tools for well-heeled and sophisticated investors, and this fall's session was no exception. But notably, this year the conference showcased some innovations for the millions of "unbanked" Americans, who because of poverty, fear, or lack of information, don't have real bank accounts.

PayNearMe touts itself as a less-costly alternative to prepaid cards and their attendant fees. The program lets individuals order items or experiences online and pay for them in cash at one of 6,000 participating 7-Elevens, without the use of a credit or debit card. The typical purchase transaction involves no fees to the consumer.

Say you want to buy a sweater for your girlfriend on Amazon. You go to the Amazon Gift Card site and click on the PayNearMe icon to choose the exact amount you'd like to purchase. Rather than paying online, you print out a PayNearMe transaction slip. At the 7-Eleven, you show the printed slip to the clerk, pay the price of the sweater in cash, and the clerk then prints out a receipt that has your unique gift card code. You enter the code on the Amazon checkout page for your girlfriend's sweater, and the sweater is on its way to you or your girlfriend. If you don't have a printer, PayNearMe will instead send a text message with a transaction code to your mobile phone. You can then give the clerk your transaction code, pay in cash, and obtain the gift card code to use on the website.

What's the benefit for the consumer? No extra fees—unless, of course, you figure in the cost of getting to the 7-Eleven.

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