The American prison industry has found a huge new revenue stream in JPay as prison bankers cash in on captive customers.
For 12 years, JPay Inc. has taken over much of the market for sending money to prisoners. It is now the only option for 450,000 inmates according to a report done by Daniel Wagner for the Center for Public Integrity.
“JPay is one of the largest prison bankers/companies that provide financial services to inmates and their families, handling nearly 7 million transactions in 2013 and expects to transfer more than $1 billion in 2014,” Wagner wrote.
The report also found that JPay shares its profits with prison systems, boosting the costs paid by families and forcing them to choose between sending money or paying their bills.
JPay and other prison bankers have become central players in a multi-billion dollar economy that shifts the costs of incarceration onto families of prison inmates, Wagner noted.
Some people arrive in jails with negative account balances thanks to fees assessed by the prison system. This forces families to pay large sums before their locked-up relative receives any money to spend, said the report.
Before JPay and its competitors introduced electronic payments in prisons, inmates’ families typically mailed money orders directly to the facility where their relative was locked up. Many say the process was faster and more convenient than going through JPay, said Wagner.
JPay grew rapidly in the past 12 years, offering to save states time and money by handling all deposits into inmate accounts. In exchange, the company is allowed to charge families fees as high as 45 percent for electronic transfers, according to Wagner.
“In no way is JPay cheaper when it comes to our families putting money in our accounts,” said one inmate in a letter sent to Wagner. “The old way of using money orders was much cheaper, easier, and in many instances, faster!”
In a Facebook post from Spain, Angel Sanchez wrote, “The weaker someone is the easiest target for the greedy. This is happening all over the world and we need to stop it.”
