Billers Challenged to Make Cash Part of the Digital Payments Experience

The conventional wisdom is that the shift to digital payments has led us all away from cash.

Jamison Jaworski, GM-SVP of retail and Green Dot Network at Green Dot, and Nicole Haskins, vice president, electronic billing and payment solutions and innovations at Paymentus, told PYMNTS that cash is still sticky, and still is a vital payment method for millions of consumers.

But paying in cash, noted Jaworski, has pain points and friction. A cash-reliant individual might spend part of the day taking a bus or public transportation to get to a central location — a check-cashing business, for example — where they can pay their utility bill, get groceries and take care of other essential business.

Bank branches are closing down at a rapid clip, which means that “financial deserts” are taking shape all over the country, and in many cases cash payments are done at the landlord’s office or phone company’s office directly.

Expanding cash payment options, they said, helps those individuals and families manage their day-to-day financial lives more easily — while providing an on-ramp for the unbanked and underbanked to embrace technology, and expanded access to financial services, too.

The conversation came in the wake of the January announcement that Paymentus has expanded the cash payment capabilities on its Instant Payment Network®. Through that expansion, powered by the Green Dot Network, billers connected to the Paymentus network will accept cash payments from customers at more than 90,000 locations.

As Haskins told PYMNTS, “We’re all trying to get to the digital transformation — and that is why we’re partnering with Green Dot to expand our Instant Payment Network.” In terms of the mechanics, users who pay bills with cash, in person at the aforementioned retail locations will also receive near real-time digital confirmation that their payment was processed and applied to their account.

In terms of the mechanics, Haskins noted to PYMNTS that many billers offer customers the option to choose among several payment methods when bill presentment takes place through online prompts. Cash Bill Pay now can be, as she put it, “another toggle that alerts them of where, nearby, they can make those payments.” The digital confirmation, she said, provides consistency for end users and for billers.

60% of Transactions Done in Cash

The greenfield opportunity to marry cash and digital conduits is significant, Jaworski said. As many as 20% of all transactions are done in cash — and when it comes to the underbanked population, that percentage rises to 60%. The Federal Reserve has estimated that more than 18.7 million U.S. households are considered underbanked, and another 5.8 million are unbanked, often relying on prepaid cards and money orders to pay bills. A growing number of younger consumers, Jaworski and Haskins noted, are opting to use cash to pay their bills.

But the Paymentus/Green Dot effort, he said, takes advantage of the fact that the 90,000 retail locations connected to Green Dot are within three miles of 96% of the U.S. population and are ideal settings to serve the desires of “cash-preferred” consumers.

“We’re extending convenience to reduce those financial deserts in small towns and other places — and now you don’t have to make a special trip to make a payment,” Jaworski said. “You can now make those payments in the course of your daily life.” With the digital confirmation, he said, payments can be made with confidence that the bill will be paid, and the lights are going to be kept on, so to speak, and essential services continue.

For Green Dot, Jaworski said, there’s the opportunity to provide more financial access and functions to these consumers — and provide an onramp to a broad range of financial activities done digitally.

“If you think about Green Dot,” he said, “we’re a bank, and in those 90,000 retail locations, not only do we have the Green Dot network, but we also distribute DDAs [direct deposit accounts] and financial products. In this partnership we are looking at ‘meshing’ the physical and the digital in order to meet the customer where they want to be met.” At a high level, the grocery or convenience store app that offers loyalty points can also have an embedded account and remind users that a bill is due and can be paid with a bar code.

The positive ripple effect extends to billers, too, Haskins observed, as instant payments speed cash flow. For the retail location, Jaworski said, foot traffic and transactions increase as cash-centric customers buy more items on site when they come to make bill payments in person.

As Haskins told PYMNTS, “We’re using innovative technology to serve a demographic that may not always be thought about,” adding that for the underbanked and cash-preferred customers, “we’re going to keep going down this path where everyone can be served.”