A big money-making opportunity

A big money-making opportunity

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.

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.

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