Allowing consumers to pay conveniently with cash for a wide variety of goods and services from leading companies in e-commerce, direct response and catalog marketing, consumer finance and beyond at a local store, PayNearMe today announced that it has secured a $16 million funding round. The round was led by Khosla ventures, with participation from  existing investors True Ventures and Maveron, and a new investor August Capital.

The new funding will be used to expand its chain of retailer payment and payee outlets, and will offer new services such as mobile payment, both jointly announced today.  The company also announced the participation of BOKU CEO, former BillMeLater Boardmember and bill veteran Mark Britto to the company’s board of directors.

“When I realized that PayNearMe could significantly improve consumers’ financial lives by offering cash payment services that are better, faster and significantly less expensive than existing alternatives, I wanted to get involved,” said Mark Britto, PayNearMe’s newest board member.  “Plus, I know from my experiences at BOKU, BillMeLater and FirstUSA how valuable a new payment network can be to merchants if, like PayNearMe, it allows them to unlock large segments of new demand.”

“Every entrepreneur wants to work with board members and investors who share their passion for breaking the mold and building important businesses,” said Danny Shader, CEO of PayNearMe. “With David, David and Mark’s support, we will continue to build our suite of convenient, reliable, inexpensive and fraud-free offerings for consumers and payees across the United States.”

The combining of virtual cash services and location-based tools is a growing trend amongst app developers and startups, as supporting channels emerge to bring these services to life.  Practicalities surrounding services like PayNearMe have enabled a new level of convenience for consumers, especially as PayNearMe builds a strong lineup of partners.

Though PayNearMe is a niche tool in its own right, it faces a great deal of competition from a platform distribution perspective.  A number of initiatives have brought integrated payment services to the mainstream, and mobile use has made it a viable alternative for consumers.  Target, for example, is pushing mobile discount tools heavily with a recent Shopkick integration, and it’s also teamed up with Facebook for the social network’s virtual currency credits system, among other developments.