paidbycash.bmpAn Oakland, Calif. company said it has introduced a way for customers to buy things on the Internet with cash.

The service, called PaidByCash, is run by the Retail Expansion Network. It wants to let you, the online shopper, select a product, and then be able to visit one of 60,000 retail outlets to pay cash for it. The outlets, which include places like Safeway and Kmart, give you a receipt, which you then must go back to verify at the PaidByCash site. You’re then issued a debit card, via Mastercard, to complete the transaction. This all sounds like quite a chore. Presumably, though, for those without credit cards, this service will be quite welcome. However, it doesn’t look like many sites are accepting the service yet, even the retail partners who have signed up. We tried buying some groceries at the Safeway Web site this morning, and it still says credit card only (See full announcement here)

A 2004 Federal Reserve study found that about a billion transactions worth roughly $120 billion are conducted annually though money orders.

Also, this service is not to be confused with PaybyCash, which does something similar, but is focused on the games industry.

Update: The company, which has been secretive until now, is backed by individual investors, including partners from Goldman Sachs, Great Oaks Capital Management, and Thomas Lee Partners, notes VentureWire (subscription required) today.