PreCash Sees Bill Pay as Acquisition Gateway (September 2013)

By Adam Perrotta, Assistant Editor

Payment providers often use GPR cards as a “hook” to draw users, attracting customers with a general use card and subsequently marketing additional services such as bill pay. But Houston-based payments processor PreCash is turning that model on its head with a new platform that uses bill pay as the initial draw to establish a customer connection, which can be built upon to offer a full slate of financial services. The recently released PreCash PayConnect platform capitalizes on what the company sees as a “broken” online bill pay experience, rife with inefficiency, slow transactions and high fees. These hurdles are especially prevalent for cash-preferred consumers, making bill pay an ideal hook to establish a relationship with those customers.

Online bill pay skyrocketed to 50 percent of all U.S. bill payments in 2012, compared to just 12 percent in 2002, according to a Fiserv study. The uptick is likely to continue with 39 percent of respondents to a recent survey by Javelin Strategy & Research planning to make more bill payments online in 2013 than they did in 2012. Meanwhile, the rise of smartphones and tablets has brought an increased demand for bill pay services via mobile device.

Retail/Mobile Combo

With the white-label, corporate-oriented PayConnect platform and its companion Evolve Money consumer-facing payment service, PreCash is capitalizing on these shifts. Evolve Money enables consumers to purchase load packs featuring PIN codes through a retail network expected to reach 100,000 locations by year’s end. The company has contracted with Blackhawk Network to enable adding cash via Blackhawk’s REloadit merchant network, along with PreCash’s own network of 35,000 retail locations. Once a consumer has purchased a PIN, he can go online via mobile app or Web and enter the biller and amount to be paid. The user then enters the PIN, and the payment is made.

PreCash’s cloud-based processing system offers payment for more than 10,000 service providers, including utilities, cable companies, insurance, wireless and other telecom providers. Payment processing time is accelerated to enable same-day delivery for 80 percent of all typical payments made by consumers, with same-day, expedited payments costing only $1.50—a rate PreCash is touting as the lowest anywhere.

“With Evolve Money, consumers have the option of making a just-in-time payment without incurring the super-high cost they often have to pay,” notes Alex Vértiz, vice president of product strategy and marketing, PreCash.

Beyond keeping fees low, PreCash is making the bill payment experience as convenient as possible, Vértiz tells Paybefore, a strategy that includes allowing users to add cash in-lane at retailers where they are likely to shop anyway.

“We tried to build a platform that stays out of the customer’s way and makes bill pay easy and painless,” he says. “Bill pay is an area that hasn’t evolved. Even credit card companies don’t provide you a simple, easy way to do it,” says Vértiz.

First Comes Bill Pay

PreCash is betting that providing a positive bill pay experience will lead users to turn to the company for expanded financial services, too. PreCash is offering Evolve Money users the option to upgrade to its Evolve Wallet, a digital wallet that comes with a reloadable prepaid card and a host of features, including instant remote check deposits, cash reload, ATM withdrawals, P2P payments, direct deposit and more. “The trust factor needs to be established with the consumer; that’s the key to getting a solid [full-service] customer,” Vértiz notes. “And once we gain that trust level with bill payment, then we have the ability to ask customers if they’re interested in more services like a mobile wallet and GPR card.”

And while PayConnect is currently targeted at cash-preferred and underbanked consumers, PreCash sees opportunity well beyond those segments. The company soon will expand its bill payment offerings to serve banked customers with debit card accounts, betting that even the fully banked can benefit from an improved bill payment experience. “Bill pay isn’t just broken for cash consumers,” Vértiz says. “It’s broken for everyone.”