Brad Hoeweler, CEO of Cincinnati–based payments startup Pay Theory, knows a thing or two about how to steer course as an entrepreneur in nascent territory. Back in the late 1990s, when the Internet was something accessed after a few minutes of wheezes and pops over a telephone landline and checks still took a couple of days to clear after being deposited, Hoeweler saw opportunity in the digital payments segment. 

He co-founded and became CEO of Skipjack, one of the first Internet payment gateways. Over the course of 12 years, he and his team built a sizable offering and customer base across North America. In 2009, through a course of acquisitions, Skipjack exited to fellow Cincinnati–headquartered payments platform Vantiv, later known as Worldpay. (Worldpay, then one of the world’s largest payment processors, was acquired in mid–2019 by FIS.) 

After spending some time in the early 2010s pondering the state of the sector — and founding Argo, a payments/fintech-focused venture lab along the way — Hoeweler had noticed some things had changed. Payment facilitation (“PayFac” for short) opened the playing field to allowing sellers to use a sub-merchant platform to handle digital payments. Rather than have to go through the process of having to set up their own payment processing technology with a credit card issuer, small businesses and startups can get an account on the PayFac, which will handle these back-end functions for them in exchange for a monthly fee. By providing a ready-made infrastructure, PayFacs revolutionized e-commerce and paved the way for startup success across the globe. 

Many PayFacs today are household names in and of themselves: Stripe, Square, Mindbody. Hoeweler realized around this time that the next phase of his career would involve leveraging these platforms for good. Via a mutual friend, he connected with fellow Cincinnati-area entrepreneur Eric Fulkert. 

A veteran of the edtech space, Fulkert laid out some of the problems he was seeing in the payments sector. After spending some time together wrangling with some of the key issues facing edtech and payments related to education, Hoeweler and Fulkert set out together to change and improve access to payments for all families. 

Voilà the genesis story of Pay Theory, a platform that streamlines payments between families  and service providers. Compared to traditional edtech, the platform takes a broader scope. By including providers beyond educators and school districts such as day care professionals and healthcare into the conversation, Pay Theory has established a new sector: Family Tech. 

Here’s how Pay Theory works: the system integrates with tools schools and districts have already onboarded, allowing for seamless transfer of funds from a family to a school or vendor’s account. Rather than having to send cash to school or to a soccer game, parents can rest assured that the money is safely at its destination. Moreover, schools, sports teams, and other child-focused organizations don’t have to worry about cash management, with accounting executed instantaneously.

Moreover, the Pay Theory platform brings the roughly one-third of US families that are underbanked into the realm of digital payments. How? The Pay Theory platform offers a cash-payment option that allows families to use a barcode that can be scanned at one of some 40,000 stores across the US, including CVS, Rite Aid, and Walgreens. Families can pay cash for the expense in question — meaning both instant settlement for the recipient and peace of mind for the family. 

Family Tech products such as Pay Theory can lead to convenience and streamlined bookkeeping for all parties involved. Yet in a greater sense, they could be the ticket to longevity for payment platforms in general. How so? Providing payment tools to the underbanked lays out a welcome mat to the formal economy. It’s a stepping stone toward economic mobility. And it beckons the next generation to take part. 

In the first of a two-part series on paying it forward, Hoeweler sat down for a conversation with the Pay Theory team to discuss how supporting the underbanked girds economic development for all. 

For the uninitiated among us, describe Family Tech. What does it mean exactly, and how exactly is it a game-changer for the underbanked?

Hoeweler: As there has been elsewhere in the US, there’s definitely a movement among schools to go cashless: handling cash could be quite a burden for everybody involved in the chain of custody of the cash, as well as the risk of loss along the way at each step. What that ignores obviously is the need for the 30 percent of public school families who are underbanked to have access to cash as a means of payment. 

Payment Plans for School Fees, Family Services

Our grand vision is to launch to family service providers such as day care centers and educational institutions to accept payments seamlessly and to allow the families that use their services the ability to pay when, where and how they want to pay.


The next step in the evolution of that will be things such as “buy now, pay later”-type services. Say you have a large activity-related bill. If you’ve got a child playing football, that can get pretty expensive. I think one of the schools that we’ve been talking with mentioned that it can cost more than $1,000 for your son or daughter to play football. 

But it might not be sports equipment fees. It could be that eighth-grade class trip to DC. The idea is that we’re helping families deal with those large one-time expenses so that they don’t become burdensome for all parties involved, while giving families the ability to take part in educational opportunities as they come up. Joining the football team can lend a sense of belonging and team spirit, in addition to exercise. That trip to Washington, DC could be a pivotal, inspiring moment in a child’s development and perhaps future career. We want to be a key part in social mobility for families.

Helping Families Establish Credit Through Cash Payments

After that, the next thing we hope to do is something kind of techy, “merchant acquiring;”  helping merchants accept payments. There’s no one who or there’s nothing out there right now that is rewarding families for making those everyday payments, those must-pay items. 

There are a couple of cards like Greenlight that helps tweens and teens learn how to manage cash. They’re gonna do some chores, you’re gonna send them some money on this card, and they’re gonna learn how to handle money, right? 

But there’s nothing out there that’s rewarding families for making their education payments, making those healthcare payments, just the everyday things that we have to do as parents. And we think that there’s a great opportunity to do that and combined with what we’re doing on the other side — the cash payments, the buy now, pay later, — theoretically, we would have access to data that is not currently being utilized to help families move along the credit spectrum.

If a family is going into Walgreens to pay for a field trip or to pay some sort of lunch room fee, they’re not getting credit for that in their credit reports. We think that we would have some very unique data sets that would allow us to provide even more powerful solutions for families.