A service that works with utilities and state and local governments to develop payment plans for individuals with unpaid debts has raised $20 million in Series A funding, on top of the $10 million it had previously raised. Called Promise, the service integrates with the payment systems of governments and utilities which typically are not built to offer or accept payment plans.
Originally built to help individuals who were imprisoned because they were not able to pay their bail, the company pivoted a few years ago to address the reasons why those individuals were incarcerated in the first place.
Individuals enroll in a payment plan with Promise, which then takes care of sending reminders, receipts for payment, and forwarding the funds it receives to its government clients. It makes its money by either charging customers a subscription fee for access to the service or via transaction fees. The service is currently available for collecting utility payments, child support payments, and taxes and fees owed for court-mandated payments such as traffic violations and victim restitution.
While some local governments offer payment plans, the process is often required to be done in person and can be cumbersome, said Phaedra Ellis-Lamkins, the Chief Executive and co-founder of Promise, in a published report.
“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,” she said. “The systems are the problem — they are not designed for people who don’t always have a surplus of money in their bank accounts.”
The service acts as a “bolt-on” service to a government agency or other collection service, according to the report.
The company pivoted from helping individuals who were incarcerated because they could not afford bail following a conversation Ellis-Lamkins had with a client who said “the difference between them and her was that she cares about people in the criminal justice system and they don’t.”