The rise of e-commerce and online billing has made life almost impossibly convenient for most of us. Set up e-billing through your checking account for your cable bill, and you never have to even think about it — the money just disappears from your account. It’s beautiful. Christmas shopping can be done from the comfort of your living room with the tap of a few keys. But for Americans without a checking account or credit card, it can be difficult to take part.

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Lots of solutions to this problem are cropping up, but none seem to offer the same level of convenience. The prepaid card market is improving, but still loaded down with fees. Many charge exorbitantly for ATM use and for loading the card — essentially charging customers for turning their cash into plastic and back again. Paying money to use your money just seems wrong to many consumers.

Worse, you can only load in discrete increments, which leads to escheatment issues, says Danny Shader, CEO of PayNearMe, a bill-pay service launched in 2010 that aims to unite e-commerce with the cash economy in a slightly different fashion. PayNearMe works like prepaid in reverse. Instead of loading a card and creating a bank account replacement — to use Shader’s term — customers place an order online and are emailed a barcode while their order is placed on hold. The length of the hold, if there is a hold at all, varies from retailer to retailer, explained Shader. Greyhound for example, which PayNearMe has partnered with, holds tickets for 48 hours.

Next, customers hop on down to their local 7-Eleven, with their barcode and pay cash to the cashier, who alerts the payee that the payment has been competed by scanning the code. This, in turn, initiates order fulfillment. If the good is no longer available, the cashier doesn’t take payment. No leftover funds, no reload fees, no waiting for someone to fill out a money order, no stamps or envelopes — nothing.

Shader explained that while they partner with some e-commerce business, their primary focus is on lenders, and utility providers, and anyone else who issues regular bills. Rather than trying to replace the prepaid card market, PayNearMe seeks to give the money order business a 21st century update.

Who would actually use it?

Western Union recently relaunched a similar service to PayNearMe, called WU Pay. It has a focus on e-commerce, and partnerships with Sears and Kmart speak to this desire. Users paying with WU Pay are emailed a receipt which they must bring to a Western Union location and cash out in order to have the order fulfilled. Unlike PayNearMe, WU Pay comes with Western Unions famously steep fees. It can cost anywhere from $2.95-$6.95 to complete a payment.

PayNearMe seems to be more customer-friendly. For e-commerce payments, it works like interchange: the customer pays nothing. For doing walk-in bill pay, they describe their fees as “more affordable than traditional walk-in payment solutions.”

This is because, in part, of their partnership with 7-Eleven. Their pitch to the convenience store was easy, said Shader: Do you want us to send lots of people with cash in their pocket into your store? Because of this mutually beneficial relationship — 7-Eleven also takes a commission — PayNearMe doesn’t need to employ clerks like Western Union does, and they have no retail footprint.

Also by focusing on bill payment rather than e-commerce, they’ve managed to make a powerful value proposition to those who need it most — and that doesn’t only mean customers. Last year, they introduced the service to Fairfield’s Utilities Department. Now, residents of the Northern California town, adjacent to the famously bankrupt Vallejo, Calif., can pay their water or sewer bills at 7-Eleven. This way, PayNearMe can save a few bucks for both the city of Fairfield and its underbanked residents.

He declined to disclose volume, but he did say that PayNearMe’s average month-over-month growth for the last year and a half has been about 30 percent — so people are actually using it.

But still…

E-commerce is growing, municipal coffers are shrinking, people are being pushed out of the banking system, and 7-Eleven is expanding — concerns about local governments funneling citizens into convenience stores aside, PayNearMe provides a somewhat elegant solution to a growing problem. Whether it can last is another question entirely. As the prepaid market grows, and mobile check deposit takes off, forcing people to go anywhere for anything might get more difficult.

Maybe they’ll need to throw in a free Big Bite or Slurpee?

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