According to a recent study by the Federal Reserve over 7 % or about 1 in 13 American households does not use a checking or savings account, and over a quarter of households rely regularly on “alternative financial services” like payday lenders or pawn shops.
Shocking statistics? Maybe. But it is a great business opportunity for savvy financial services firms who want to make life easier for employers who hire unbanked employees.
Firms such as an Atlanta, Georgia-based PayPartners which offers large companies the ability to pay their employees with pre-loaded debit cards are one such company
PayPartners provides unbanked employees with a safe and inexpensive alternative to check-cashing firms and pawn shops, who often charge between 1 and 6 percent of the face value of a paycheck, in order to cash it.
Additionally, PayPartners provides debit cards so companies can reimburse employees for travel and expenses, and incentive payment cards so employers can reward their employees for contests or meeting company goals.
Building a complete solution: credit card processing, international payments and customer self-service
PayPartners needed to build a complete solution that not only included credit card processing, but also enabled employers to make international payments and cut customer service costs.
Several years back, Pay Partners turned to Softjourn to help them continually develop and support their solution.
Softjourn helped PayPartners build a system that enables employers to issue, re-issue, and move monies in real time, provide role-based access to information, provide real-time reporting capabilities, and enable employees to enroll for their service online.
Financial applications and user interface design: the ideal combination
PayPartners chose Softjourn because of their extensive financial expertise, such as knowledge of credit card processing, online payment processing, and international money transfers.
However, they also needed a firm with the front-end experience to build a self-service portal that both employees and employers could use, cutting customer service costs. Softjourn fit the bill.
PayPartners CEO Ryan Powers stated: “The work …. done to this point has helped us streamline our operations and has eliminated the need for us to hire customer service reps….we were able to extend more control to our clients which allows them to better manage their payment process.”
Enabling international payments
PayPartners needed to issue international cards for companies with overseas employees. They also had to replace the Lynk processing system with the i2C and Transcard processors. Softjourn assigned a two-person team to help them with this successful move.
In early 2011, PayPartners took a major step forward in the market of cash and checks. For persons who have traditional bank accounts, when they cash different types of checks, depending on the type of check, the funds will be “provisionally” available only, and if the check bounces the funds will be reversed. Because of the risk of many checks such as handwritten payroll checks or two-party checks, it is often difficult for unbanked persons to be able to cash those checks. There is no option for an unbanked person to have funds “provisionally” available.
To help alleviate this problem, PayPartners developed a new BranchOffice solution for check cashers (retail banks initially). As part of this solution PayPartner’s existing Back Office (BO) service was integrated with CHEXAR®’s check cashing and guarantee solution which lets check cashers safely cash over 20 types of checks, the types of checks which are often difficult for unbanked persons to cash.
CHEXAR is the national leader for technology and solutions that enable clients to cash any check and provide unbanked customers the option to receive cash for the check and/or load that cash on to a card, such as PayPartners Prepaid Card.
As part of the integration with Chexar, the following functionality was included in the new BranchOffice solution; check verification, online chat, risk management evaluation and immediate card deposit. This new PayPartners’ BranchOffice solution lets bank departments or financial organizations work with customer’s checks in banks, stores, etc.
Since BranchOffice is to be deployed in financial institutions, it was necessary to add additional risk mitigation and ID verification features to meet financial institution’s compliance requirements. These requirements include giving FI’s the ability to control and set users limits such as: maximum number of checks that can be cashed in one day, maximum total amount of checks that can be cashed in one day, maximum single check amount to be cashed, etc.
Chexar’s system will allow clients using BranchOffice to validate the authenticity of a check and to perform any required compliance verification such as OFAC and CIP on the customer. Each financial institution will determine what forms of identification will be accepted. The customer will have the option of having all of the value of the check (minus the check cashing fee) converted to cash or having all, or some, of the value of the check deposited to a prepaid card (minus any applicable fees).
Check scanning was enabled using a scanner and software from ScanShell which reads the MICR line on the check. The check amount is entered manually by the operator. Since PayPartners’ BO works under Linux/Apache and the scanner software uses Windows drivers, Softjourn integrated the two using Active-X components. According to Yuriy Kropelnytsky, Sr. Developer and Project Lead for Pay Partners, “I was very glad to work with people which considered me not just a third party programmer. I felt like a full member of the PP team and was able to make my own decisions and come up with creative solutions for the service and features PP wanted to provide.”
In today’s web savvy world, even the non-banked have access to the Internet, through inexpensive home computers or through the new generation of web-enabled smartphones.
Finding a development firm that combines deep expertise developing financial applications, such as credit card processing, online payment processing, international money transfers, and mobile banking is hard enough.
Finding a firm with financial expertise and user interface design experience for the web is a rare bonus.
Contact Softjourn for more information on how we can help you build a financial application for the web.