My Payment Network Looks for Growth from Resellers, New Clients

My Payment Network Inc., a Corte Madera, Calif.-based startup specializing in invoice-based electronic-payment processing for schools and small businesses, says its SchoolPay product could reach between 3,500 and 4,000 schools in the coming year, up from more than 50 at the end of the 2005-06 academic year. At the same time, the company says MyPayNet, which the company aims at tradesmen, professional firms, and other small businesses, has signed an unnamed public company, which it says should send transaction flow soaring. My Payment Network, which incorporated in February 2005 and went operational a year ago with SchoolPay as its first product (Digital Transactions News, Oct. 10, 2005), has signed distribution deals with four vendors of school-administration software. David Dunaway, a former Yodlee Inc. executive who is president and chief executive of My Payment Network, says these software products typically have a so-called parent portal, which is where SchoolPay is being integrated. “We're looking for more distribution deals,” says Dunaway. “There'll be five or six when all is said and done.” Totaling all public and private schools, including pre-kindergarten facilities, Dunaway estimates there are between 150,000 and 300,000 schools in the country. SchoolPay allows parents to pay electronically via the Internet for hot lunches, field trips, sports fees, and other items that crop up during a school year. The product processes credit card and signature-debit transactions through two processors, TransFirst, Dallas, and ProPay USA Inc., Orem, Utah. It also handles e-checks, routing these automated clearing house debits through Electracash Inc., Signal Hill, Calif. Though it offered PayPal after it went live, it no longer does. Schools determine which forms of payment they will accept, says Dunaway. The processors perform net settlements to the schools, which in some cases pass a portion of the transaction fees on to parents as convenience fees. Currently, SchoolPay has between 1,500 and 2,000 parents using the system. It ended the last school year handling more than 2,000 transactions a month. “Growth is very hard to pin down,” Dunaway says, though with the distribution deals, he says “we expect it to be explosive over the next few months.” Meanwhile, MyPayNet, which went live a few weeks after SchoolPay and allows small businesses to electronically send and receive payment on invoices, claims a base of “a few dozen merchants doing 10 to a few 100 transactions a month,” says Dunaway. But that could change with the signing of the public company, which is a franchise operation. Dunaway says he's using individual sales agents to help sell MyPayNet, and is looking at niches such as sports instructors and municipal governments. The company has also introduced new tools to make it easier for new clients to import existing customer records. The target client base for MyPayNet is “non-retail, service-based” businesses, says Dunaway, that send out a few hundred invoices each month. “These are niches you would never think of but are quite lucrative,” he says. Like SchoolPay, MyPayNet handles cards and e-checks. For SchoolPay, My Payment Network charges schools 2.99% plus 30 cents for a card transaction, and 65 cents for each e-check. It waives its $150 set-up fee. For MyPayNet, it charges businesses 2.69% plus 30 cents for card purchases, and the same 65-cent ACH fee. But businesses must pay the set-up fee.