It’s never simple to pay your expenses, but the previous few years of difficulty have made it considerably more difficult. Promise collaborates with utilities and government organizations to offer payment flexibility to customers who can’t afford to pay their entire water or power bill all at once. Over the course of 2021, the firm has experienced tremendous growth, and it just received a $25 million B round to keep the momentum going.
Promise collaborates with government agencies and other organizations that collect a variety of payments, including utility bills and license fees. Normally, payment systems for these are highly strict, and they don’t adjust for changes in income or free cash; Promise, on the other hand, offers a simple, interest-free installment payment plan for things like an energy bill.
“For individuals with money, we want systems with as much flexibility as possible, but for poor people, that’s not how it works. If you don’t pay by the 5th, you don’t get the service, and you face the consequences,” said Phaedra Ellis-Lamkins, CEO, and founder of Promise. For example, if you don’t pay your commercial driver’s license fee on time, you won’t get the license and won’t be able to work to pay for it, or if you don’t pay your gas bill on time, you’ll be charged late fees, and so on. In a time of enormous fiscal uncertainty, such inflexibility doesn’t really make sense.
The old systems, according to Ellis-Lamkins, are built on the assumption that if someone doesn’t pay, it’s because they don’t want to, and they’re punished with fees and interest, or forced to utilize a predatory service like a payday lending company. Promise, on the other hand, takes a different approach. “Our premise is that they can’t pay structurally – it’s not a choice,” she explained. “People will pay if you develop a system that works better for them.” The data seems to back up this theory: places, where the majority of people had rolling government debt, were suddenly paying it off at rates of over 90%.
“The science of what we do is getting better and better,” she continued. And governments have realized that it makes sense to pay for a service that increases the likelihood of revenue coming in. Promise and I spoke almost precisely a year ago when it received $15 million to expand its operations, which it has done. Revenues and consumers (that is, utilities, not bill payers) increased by 32x and 45x, respectively, throughout the course of the year. It also stated that it has already booked multiples of those multiples in the first weeks of 2021.
I inquired as to the nature of that expansion. “It looks like adding child support, it looks like adding parking charges – we have a really wide client set,” she added. “We just want people to not confront the unpleasant repercussions of government debt, and we don’t want people to pay interest on it. We’ve gotten good at getting money in, but we’ve also wanted to get incredibly good at getting money out.” Promise’s direct link with someone like a utility, she noted, allows them to see things like government subsidies or stimulus payments.
For many, getting money or a discount that has been officially allotted to them requires filling out paper forms, providing tax records, and visiting a location in person, which is inconvenient even in the absence of a pandemic. Government agencies are aware of who qualifies but do not notify them in advance, so Promise does so on their behalf. To be clear, this is money that local and state governments want to give away — budget items or federal money that might be lost if not awarded. However, like any bureaucracy, speed and communication are not their strong suits. Promise gave out 10 times what the local government had in a Louisville case study by texting eligible folks and telling them to “come and grab it.”
