In Depth

PaySwag Serves The Underbanked With Mobile-Enabled Cash Payments

Consider these figures: $45.9 billion. $1 trillion. 4.2 million.

In order, that’s the value of unpaid health care bills in U.S. hospitals each year; the amount of subprime auto loans that have a 25 percent default rate, and the number of driver’s licenses in California that are suspended due to unpaid fees.

Now consider how many U.S. adults are believed to be underbanked: 68 million.

That’s where PaySwag comes into the mix, and uses its customer engagement technology and mobile-enabled cash payments platform to try to recreate the payment experience for those who are underbanked. And it does so with an educational and rewards-based twist. It’s also white-labeled for lenders, government and health care.

“The underbanked really don’t have a rewards program. They don’t have an incentive program. They don’t have  frequent flyer miles program. So this is kind of brand new and fresh to them. It’s a way for them to get rewarded, because we believe they are underbanked and under rewarded,” Max Haynes, PaySwag’s CEO, told PYMNTS in an interview.

[bctt tweet=”The underbanked really don’t have a rewards program. They don’t have an incentive program.”]

“Really what it comes down to are things like payment arrangement. The underbanked really need a way to settle their obligation. They may not be able to pay in full using a credit card,” he explained.

PaySwag integrates with popular platforms like PayNearMe — which has 17,000 locations that allow people to make mobile-enabled cash payments at places like 7-Eleven. But where PaySwag takes that payment experience a step further is in the rewards process.

We’re really trying to take FinTech out of the banking space.

They look at this process as a “gamified mobile experience,” that turns the tedious payment process into a more rewarding process — literally. And because the underbanked are often those that need help stretching out those payments due into installments, PaySwag’s partnerships with businesses and government organizations offer simpler ways for those patrons to pay off their bills.

And when those bills are paid on time? The user is rewarded with things like Amazon gift cards, Redbox rentals, or Starbucks lattes. Those bills (or fees and fines) of course, can me paid off anytime, and at any location where PaySwag offers the mobile-enabled cash payments. The payments are reflected instantly and the rewards can be cashed in immediately after the payment goes through.

“We’re really trying to take FinTech out of the banking space,” Haynes explained, as he rattled off where and how the underbanked are being served. “And move [FinTech] into health care, into government, into helping resolve your child support, helping resolve your student loans.”

It also claims to empower the underbanked by reducing serious delinquencies by 50 percent — which is one of one of the main pitches it provides its potential clients with when explaining the benefits of PaySwag.

The PaySwag team also pitches other key stats like its claims that: 46 percent of users have elected to earn points by watching educational videos; 68 percent of users are making payments with cash at 17,000-plus integrated locations; 52 percent of PaySwag points are awarded for consistent on-time payments; and 40 percent of those invited choose to adopt PaySwag.

PaySwag recently presented at the Finovate Fall conference in NYC, where the executive team also explained its mission and showed off its technology. Check out the video below to learn more. 

From the government side, PaySwag brought on Brian Krolicki, the former Lt. Governor of Nevada, as the Director of Government Relations to help government organizations see the value in bringing in PaySwag to help settle its fines and bills that otherwise might not get paid. Because setting up a payment plan with individuals can be tedious — on both the payer and payee side — that’s where PaySwag takes care of the logistics.

The person gets a plan to make their payments, the government (or business) gets paid and the consumer gets rewarded.

While some organizations have accepted the fact that some people just won’t pay, PaySwag believes its mobile-enabled payments platform can change that “status quo” philosophy and ensure payments get made, and that those payments, in turn, become the basis for rewards.

“We provide access to those people in a way that will make them engage,” Krolicki said. And it aims to provide that access in a non-threatening way that lets users pay on their time, their schedule and without having to wait in long lines.

“Most of us can avoid the lines if we have a credit card. These people don’t have credit cards. They don’t have a bank account. But you know what, they’ve all got one of these,” he said, pointing to a smartphone. “We’ve used the phone to help them resolve a big problem and completely focus on the underbanked.”

The other element of PaySwag that gives it an edge in the competitive landscape of payments platforms is the fact that it works to reduce payment friction by allowing for information to be entered once so the user doesn’t have to have that bill number, account information or loan number on them when they have to make a payment.

There’s no need to log onto a computer, or even email, which can also be seen as a friction point for the underbanked since many of them don’t have email or a personal computer. From a security standpoint, the information is all secure and the clerk who accepts the cash payment doesn’t even know what the loan information is for. They just scan a barcode, and the instant gratification appears on the user’s phone.

“This is about taking the friction out of relationships that’s going to be extended for a period of time,” Krolicki said.

Payments get made. Governments and businesses get paid. Consumers pay off their obligations — and get rewarded.

“This is a way where everyone wins,” Haynes added.

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