The last year has been a person of financial hardship for billions, not to mention among the specific hardships is the regular one of paying for utilities, taxes perfectly as other government fees — the technologies for which are rarely set up for easy or even flexible payment. Promise aims to change that by integrating with official payment systems and offering more forgiving terms for fees and debts people can’t handle all at once, and has raised $20 million to do so.
When every penny is going toward rent and food, it can be hard to muster the cash to pay an irregular bill like water or electricity. They’re less likely to be shut off on short notice than a mobile plan, so it’s safer to kick the can down the road… until a few bills add up and suddenly a family is looking at hundreds of dollars of unpaid bills and no way to split them up or pay over time. Same with tickets and other fees and fines.
The CEO and co-founder of Promise, Phaedra Ellis-Lamkins, explained that this (among other places) is where current systems fall down. Unlike buying a TV or piece of furniture, where payment plans may be offered in a single click during online checkout, there frequently is no such option for municipal ticket payment sites or utilities.
“We have found that people struggling to pay their bills want to pay and will pay at extremely high rates if you offer them reminders, accessible payment options and flexibility. The systems are the problem — they are not designed for people who don’t always have a surplus of money in their bank accounts,” she told TechCrunch.
“They assume for example that if someone makes their first payment at 10 PM on the 15th, they will have the same amount of money the next month on the 15th at 10 PM,” she continued. “These systems do not recognize that most people are struggling with their basic needs. Payments may need to be weekly or split up into multiple payment types.”
Even those that do offer plans still see many failures to pay, due at least partly to a lack of flexibility on their part, said Ellis-Lamkins — failure to make a payment can lead to the whole plan being cancelled. Furthermore, it may be difficult to get enrolled in the first place.
“Some cities offer payment plans but you have to go in person to sign up, complete a multiple-page form, show proof of income and meet restrictive criteria,” she said. “We have been able to work with our partners to use self-certification to ease the process as opposed to providing tax returns or other documentation. Currently, we have over a 90% repayment rate.”
Promise acts as a sort of middleman, integrating lightly with the agency or utility, which in turn makes anyone owing money aware of the possibility of the different payment system. It’s similar to how you might see various payment options, including installments, when making a purchase at an online shop.
The user enrolls in a payment plan (the service may mobile-friendly because that’s the only kind internet many people have) and Provide handles that end of it, by means of reminders, receipts and processing, passageway on the money to the agency as it features — the company doesn’t cover cash necessary up front and collect on its own terminology. Essentially it’s a bolt-on flexible installment payment mechanism that specializes in government agencies and other public-facing fee collectors.
Predict makes money by subscription fees (i. e. SaaS) and/or through transaction fees, whichever makes more see for the given customer. As you might consider, it makes more sense for a practical use to pay a couple bucks to be much sure of collecting $500, than to undertake its chance on getting none of that $500, or having to resort to whole lot more heavy-handed and expensive debt collection forms.
Lest you think this may not be a big problem (and consequently versus big market), Ellis-Lamkins noted a newly released study from the California Water User discussion forums showing there are 1 . 6 several people with a total of $1 billion wearing water debt in the state — one in eight households is in defaults to an average of $500.
Those numbers are likely even more draining than vacancies than normal, given the tremendous financial pressure that the pandemic includes placed on nearly all households — even though like payment plans in other disorders, households of many incomes and products find their own reason to take advantage of these sort of systems. And pretty much anyone who is had to deal with an obtusely purpose designed utility payment site would you are welcome an alternative.
The new brown brings the company’s total heightened to over $30 million, counting $10 million it raised immediately after placing Y Combinator in 2018. Typically funding comes from existing investors Kapor Capital, XYZ, Bronze, First Around, YC, Village, and others.