Why Online Resources Is Linking to DolEx, Other Walk-in Operators

The trend toward combining electronic bill-payment services?particularly payments that post on the same day they're made?with walk-in remittance locations took on more momentum last week with the announcement that Online Resources Corp. will process expedited payments for DolEx Dollar Express Inc., a remittance operation belonging to Atlanta-based Global Payments Inc. DolEx, which has 785 locations, will be able to use Online Resources to offer same-day, or expedited, payment services to its mostly underbanked customer base, which pays chiefly in cash. The deal is the second such arrangement Chantilly, Va.-based Online Resources has made this spring with a remittance service, having announced in May that it had signed Ace Cash Express Inc., which operates 1,800 walk-in locations. Online Resources introduced its expedited-payments service in April, after piloting it last year (Digital Transactions News, May 21). Robert Craig, executive vice president for the e-commerce services unit of Online Resources, says the processor has cut deals with four other unnamed remittance companies, and expects to bring the total number to eight by the end of the year. Total locations, he says, will range from 15,000 to 20,000 at that point. “We're excited about the opportunity,” he says. Craig says deals with walk-in locations extend the reach of the billers Online Resources serves, allowing them to take cash payments from thousands of customers without having to build or contract for brick-and-mortar storefronts. Online Resources maintains hundreds of direct links to billers' accounting systems, which enables the company to post payments on the same day customers hand over their cash.. For DolEx, the deal presents the opportunity to earn a wider margin on walk-in bill payments, says Matt Thomas, vice president of payment services at the company and a former executive with Ace Cash Express. Whereas DolEx would charge around $1.50 for what it calls a “basic” bill payment, or one that might clear in two to three days, it can charge $5 to $7 for an expedited transaction. Customers, Thomas says, gladly pay the premium to avoid late fees and other penalties. “This is what our customer needs,” he says. “This consumer is a just-in-time person. He gets paid today and comes in and pays his bill today, and in many cases the bill is due today. They can't go online and pay Wachovia like you or I do.” DolEx, he says, has a similar, albeit smaller, arrangement with PreCash Inc., a Houston-based processor. The deal between Online Resources and DolEx follows a link-up last year between IPP of America Inc., an operator of walk-in bill-payment locations, and processor TIO Networks Corp., Burnaby, B.C. (Digital Transactions News, Nov. 29, 2007). At the same time, CheckFree Corp., a bill-payment-processing unit of Milwaukee-based Fiserv Inc., has operated a chain of walk-in payment locations since its 2003 acquisition of American Payment Systems. In most cases, the strategy behind combining electronic bill payment with cash-based walk-in service is to appeal to the underbanked consumer who may have no other way to make an expedited electronic payment. The allure of higher fees for such payments?coupled with a growing need for electronic-transactions services among the underbanked–is strong enough that DolEx will build some direct links of its own with billers, Thomas says. “Our client base is 95% Hispanic,” he says. “A lot of folks are after than Hispanic market.”