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The big business of selling apps to prison inmates

The United States has the highest incarceration rate in the world, with about 5 percent of the world’s population, but 25 percent of the world’s prisoners.

For some businessmen, that represents a big money-making opportunity, and few can attest to that better than Ryan Shapiro, CEO of JPay, a company that provides various services for inmates.

 

“Our goal is to become the nation’s digital consumer app company for prisons,” Shapiro told CNBC.

 

JPay got its start in 2002 by offering electronic money transfers for inmates. This way, inmates’ families could transfer money to a prisoner’s account via computer or smartphone instead of leaving their homes to send a money order.

Source: JPay

Source: JPay

 

Those money transfers represent the bulk of JPay’s business—about $50 million in revenue last year—but the company also offers services like email, tablets, video visitation and music downloading. (It’s now piloting an e-books program in a prison in Ohio.) JPay has been profitable since 2006, and processed over $500 million in 2013, said Shapiro.

 

Helping JPay’s business is the fact that it has a near-monopoly for providing these services. The company now operates in 32 states and over 1,200 facilities nationwide, servicing about 1.7 million inmates.

Revenue sharing with states

 

Aside from prisoners, the business has another beneficiary: state coffers. In return for doing business, JPay gives the state a cut of its revenue. For example, if JPay charges $3 for a money transfer, the state might get 50 cents, depending on each individual agreement. (The company charges $1.45 to $24.95 per transfer, depending on the amount of money sent.)

 

“Government agencies can and will accept a portion of the revenue as an incentive to put the program in, because if there’s any agency or department that’s strapped for cash or for money, it’s corrections,” Shapiro said.

JPay’s fees vary based on such factors as how much the state takes and fees paid to third parties like banking software companies, Shapiro said.

States vary as to what services they will allow businesses to sell to inmates “It really depends on the ‘political mood,” Shapiro said.

 

At the North Dakota State Penitentiary, where over 50 percent of the population uses JPay in some form, all of the company’s services are allowed, Warden Colby Braun said.

 

“It’s a way to improve what they have and improve their lives, that’s the whole focus of this,” Braun said.

 

Is it right to profit from prisoners?

 

Critics, though, question a model where states and companies benefit on the backs of prisoners and their families.

 

Jack Donson, who worked at the Federal Bureau of Prisons for 22 years, doesn’t think so.

 

“I always say we’re a third-world correctional system in the United States.” Donson said. “This is a capitalistic society, so I fault more the government—bureaucracies—who are profiting from this as well. The sentence is the punishment.”

 

Shapiro argues that the services help prisoners.

 

“Our tablets help rehabilitate inmates so they are better equipped for success once released. Technology also plays a role in behavior modification—an inmate that is engaged during the day is less likely to act out in violence,” he said.

Shapiro also claims that the state’s cut of JPay’s business goes back to the inmates, whether in the form of recreational activities or building infrastructure to support educational programs.

 

Donson, who now runs a private prison consulting business and serves as an advocate for prison reform, disagrees.

 

“I also think there’s an overplaying of, ‘Oh, this money goes back to benefit the inmates.’ I think that’s true, but I don’t think it’s true to the extent that they portray,” he said. “If you would do some due diligence on where that money really goes, I think you would find that not a lot goes directly to inmate programs.”

 

(Another important issue is how these fees impact families outside the prison who pay them. Shapiro says its fees are too low to affect inmates’ families. A joint investigation by the Center for Public Integrity and CNBC found that many families are financially burdened trying to keep up with all the costs associated with having a relative or friend behind bars. See that report here.)

 

Will regulators go after other prison businesses?

 

Another objection some critics have is that prisoners and their families could easily be gouged by the fees and commissions.

 

In fact, federal regulators have already gone after some companies, especially those that provide phone services for prisoners.

 

In 2013, the Federal Communications Commission capped phone rates after an investigation revealed that prisoners were being charged what the agency called “exorbitant” rates.

 

Following a hearing on the issue, prison phone companyPay-Tel, CEO Vincent Townsend said that his industry abused the public, and that’s why regulators had to ultimately step in.

 

“I’m not a fan of regulation. But if your industry won’t self-correct yourself, then you have no choice—regulators at some point are going to step in,” Townsend said. “My counsel to other industries that serve a prison population is you better pay attention to what’s the ethical, right, moral … because if you don’t treat people fairly, ultimately it’s not a long term business plan.”

JPay has not been targeted by any Federal probe.

 

Regardless of the flaws in the system, Shapiro said he is providing valuable services to those behind bars.

 

“Before JPay came around, that type of customer service did not exist in corrections,” Shapiro said.

 

“It’s unfortunate that no one’s come out with a better model and if somebody did, that would be fantastic. But nobody has yet.”

 

 

 

 

 

 

 

 

 

 

 

"I'm just trying to make a way out of no way, for my people" -Modejeska Monteith Simpkins

 

AFRICAN AMERICA IS AT WAR

THERE IS A RACE WAR ON AFRICAN AMERICA

THERE IS A RACE WAR ON AFRICAN AMERICANS

THERE IS A RACE WAR ON BLACK PEOPLE IN AMERICA

AMERICA'S RACISTS HAVE INFILTRATED AMERICAN POLICE FORCES TO WAGE A RACE WAR AGAINST BLACK PEOPLE IN AMERICA

THE BLACK RACE IS AT WAR

FIRST WORLD WAR:  THE APPROXIMATELY 6,000 YEAR WORLD WAR ON AFRICA AND THE BLACK RACE

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Originally Posted by sunnubian:

The big business of selling apps to prison inmates

The United States has the highest incarceration rate in the world, with about 5 percent of the world’s population, but 25 percent of the world’s prisoners.

For some businessmen, that represents a big money-making opportunity, and few can attest to that better than Ryan Shapiro, CEO of JPay, a company that provides various services for inmates.

 

“Our goal is to become the nation’s digital consumer app company for prisons,” Shapiro told CNBC.

 

JPay got its start in 2002 by offering electronic money transfers for inmates. This way, inmates’ families could transfer money to a prisoner’s account via computer or smartphone instead of leaving their homes to send a money order.

Source: JPay

 

Sick, big money will see to it that jails are full. US culture is the most sick fukked up culture among modern countries. I see no end to high levels of incarceration. they will find ways to jail people for non violent charges. This is why so many are locked up for non-payment of child support, violations of their probation and parole, recreational drugs and whatever charges they can dream up. Cops profile black people to incarcerate blacks and to strip wealth from blacks.

 

They stain people with arrest and conviction records and in most states they never go away hoping that they can't find work to create a hostile society against those who have records so they will recommit crimes. 

 

All of this is about Jim Crow, they know they don't need as many people in the workforcebecause those jobs are off-shored or replaced with machines so in order to keep the working population down, incarcerate them and get paid with tax money, get paid by inmates. 

 

It is Jim Crow because whatever jobs are left they don't want blacks or browns competing for those jobs. The thing is the Browns and yellows have their own economy and we don't. When are we going to wake up, that this country is a goddam white supremacist oligarchy and their aim is to exploit or eliminate as many black and brown people as possible?

 

Their is a deliberate program to eliminate people of color in the United States. The white oligarchy feels it is over populated and black people must be disenfranchised and they are doing a damn good job of it.

Last edited by Momentum

I think your take on it is correct in the minds of so many Americans.  

 

It's amazing that the predominate race in this country can't seem to put two and two together [or want to live in denial of facts] that Black people are only about 12% of the population, and when they run out of Black people to be the "product" of the Prison Industrial Complex Industry Plantations, they are not going to just walk away from all those millions/billions in profits.  White people in America can keep thinking that the militarization of Police in America is really only for Black people if they want to.

 

Most of the Jews in Germany initially agreed with the rhetoric and twisted philosophy of certain people/groups/races being 'inferior', until they found out that they, too, were to be included in the groups/people/races deemed 'inferior'; by then it was too late.  

 

 

Last edited by sunnubian
Originally Posted by sunnubian:

I think your take on it is correct in the minds of so many Americans.  

 

It's amazing that the predominate race in this country can't seem to put two and two together [or want to live in denial of facts] that Black people are only about 12% of the population, and when they run out of Black people to be the "product" of the Prison Industrial Complex Industry Plantations, they are not going to just walk away from all those millions/billions in profits.  White people in America can keep thinking that the militarization of Police is America isreally only for Black people if they want to.

 

Most of the Jews in Germany initially agreed with the rhetoric and twisted philosophy of certain people/groups/races being 'inferior', until they found out that they, too, were to be included in the groups/people/races deemed 'inferior'; by then it was too late.  

 

 

The idea that prisons should be privatized for profit is sick and a conflict of interest in that the prison industrial complex are going to make sure they have a constant flow of inmates to fill their prisons in order to make profits from federal, state, city, town, tax revenues. Lawyers and Judges profits from high incarceration too. This is why there is such a high resistance to legalizing Cannabis on any level. You notice the steam is being taken out of the movement, I doubt anymore states will do what Colorado and Washington did making Cannabis a legal recreation drug and citizens are free to grow 6 plants without breaking the law. They will allow medical on a very limited basis but hell no they don't want laws that remove convictions of any kind. 

If it wasn't for forcing/having "black" folks in this country, these ex-immigrants would have been poorer than church mice.

 

One thing's for sure, patting one's foot to the Waltz and damn Minuet would have probably been one heaping drag.

 

Have you noticed that the Great White Race of all Humanity have geniuses and experts on every subject knows to man and the world is slowly melting away, being blown away, lives of all kinds dying away to extinction, no ice for polar bears and walruses, some sea dried completely in the Middle East/Africa.  Diseases formerly unknown cropping up, eventually everywhere. Mostly when they say something won't happen, it happens.

 

Perhaps these geniuses and experts aren't geniuses and experts after all.  They just might be a bunch of wind bags like most of the rest of humanity.

Last edited by Norland

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