Oside FinTech startup takes on cash management

Spare turns local businesses into virtual ATMs and reduces costs for cash management for businesses and customers

D’Ontra Hughes of Oceanside was a panelist at San Diego Startup week in Carlsbad in October. He launched Spare in 2015, which he says reduces cash management costs for businesses by 90%. Steve Puterski photo

OCEANSIDE — The need for cash without paying high fees is part of the business model for a budding startup.

D’Ontra Hughes, founder and chief executive officer of Spare, is using his experience in banking to transform cash management and recruit local businesses to be part of his virtual ATM network. Cash management is a $22 billion industry (not including the ATM industry) and Hughes, and his company are working to reserve the trend of higher costs for those services by having businesses act as virtual ATMs.

Spare is a digital network where a customer can request cash through the network and select a nearby business. The customer shows up, gets the cash and then can either leave or make a purchase, Hughes said.

He said his company reduces the cost by 90% for people to access their cash and saves the business money from processing its own cash through banks. They currently have 8,000 accounts and are growing.

“The way the system works, once the customer picks up the cash, we consider that a remote deposit,” Hughes explained. “We then credit your merchant bank account. It’s instant for them. We’ve been paying folks to pick up cash. You might make $2-$5 to pick up cash … and that’s one way we offset the expensive cost that merchants are currently spending, which ranges from $300 to $1,600 per month for cash management.”