May 31, 2013
I live in a beach community in San Diego that bustles with commerce on any given day of the week. It is a fantastic place, but there is one major drawback that haunts me no matter what store, restaurant, or bar I step into. Plastered onto the face of cash registers and walls are two words no patron ever wants to see: CASH ONLY.
Rarely do I or my colleagues carry cash. But why, then, do these establishments remain firm in maintaining a cash-only policy? Routinely, the answer comes down to banks or companies gouging them on transaction fees if they were to accept plastic.
Upen Patel, founder and CEO of Digital Wallet Plus (DW+), has made it his mission to provide merchants a way to avoid high transaction fees while giving customers a way around the dreaded cash-only dilemma with an electronic wallet.
DW+ provides merchants and consumers an alternative form of electronic cash transaction that costs the merchant significantly less. The electronic wallet was designed for smartphones and gives consumers access to an FDIC insured account with direct deposit and bill pay features. Users add funds to their electronic wallet from their bank account.
Merchants are awarded an alternative to credit and debit card readers and can accept electronic payments through the DW+ app, which consumers present at the time of their purchase. There are low transaction fees, no swipe fees, and a built-in rewards function for DW+ users.
“People sometimes say that those who use debit or prepaid cards do not have, or do not make, a lot of money,” says Patel. “Guess what? If that were true, then that demographic would not be spending 1.82 trillion dollars on the debit and prepaid market annually.”
Unbanked and under-banked consumers can get very fed up with bank account service charges, minimum balance requirements, overdraft fees, prepaid card fees, and overall costs ad nauseam. At the same time, small- to mid-size merchants pay disproportionately higher percentages in transaction fees.
These merchants tend to take fewer business risks, but banks charge them 2 to 2.5 percent on all transactions. Additionally, technology implementation and usage should be decreasing the costs on these transactions, but the prices are going up.
Look no further than your neighborhood convenience store ATM for proof. How much is the transaction fee? In my neighborhood, it is around three to five dollars per withdrawal.
“There is nobody out there to challenge the big companies and banks,” explains Patel. “I want to leverage the mobile and banking platforms to build a cash transaction network independent of big companies.”
Digital Wallet Plus was featured at Tech Cocktail’s DC Mixer & Startup Showcase on May 15th.
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