Prepaid Acquisition Opens A New Market for Cachet and Remote Check Capture

By Kevin Woodward

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Cachet Financial Solutions Inc.’s acquisition of DeviceFidelity’s Moneto prepaid mobile platform will help open new markets for the remote-deposit capture company.

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Minneapolis-based Cachet announced this week it bought the platform for an undisclosed amount from Richardson, Texas-based DeviceFidelity.

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Remote-deposit capture is Cachet’s core business, Larry Blaney, executive vice president of sales, tells Digital Transactions News. But in the past two years client demand for services beyond that core component has increased, leading to the acquisition. “Our intent is to take the platform we just purchased and make it a white-label platform,” Blaney says. It can be customized and branded for program managers, he says.

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“We have the Moneto brand,” Blaney says. “We’ll continue with that, and we will make the platform available to other program managers.”

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That may entail offering mobile remote-deposit capture, card balance and history information, loyalty and rewards program management, person-to-person transfers, expedited bill pay, and remittance.

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The mobile remote-deposit capture feature may be especially appealing to program managers and their customers, Blaney says. With that service, a prepaid cardholder could capture an image of a check and send it to the prepaid service for deposit. The program manager then reviews the check, and if approved, places the funds directly into the cardholder’s prepaid account, he says.

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Another market is banking customers who do not have direct deposit, a tally Blaney estimates at approximately 40 million. Cachet intends to develop a prepaid product for the almost 300 banks and credit unions that work with Cachet, he says.

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Credit unions represent a strong growth area for Cachet, with transactions for this segment growing at 26% per month, Blaney says. Alternative financial services, which include check-cashing services and payday loan providers, is growing at 23%, and banks at 20%, he adds.

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Cachet’s strategy may bear fruit, suggests Tim Sloane, vice president of client services and director of the prepaid advisory service at Mercator Advisory Group Inc., a Maynard, Mass.-based consulting firm.

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“Low and moderate-income individuals as well as small businesses often receive checks, and the ability to deposit these by mobile phone is a tremendous convenience,” Sloane says. “Because the low to moderate-income consumers constantly faces liquidity problems, the ability to get immediate and irrevocable access to the funds is often a critical need.”

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Small-business owners, too, tend to sustain themselves, and their employees, on the need to have immediate access to funds to make their payrolls, Sloane says.