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Promise’s flexible payment platform for government debts grows fast, raises $25M to keep growing

Paying bills is never easy, but the last couple years of hardship have made it even tougher. Promise works with utilities and government agencies to provide…

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Paying bills is never easy, but the last couple years of hardship have made it even tougher. Promise works with utilities and government agencies to provide flexibility in payments for people who can’t cover their whole water or electricity bill at once. The company has seen enormous growth over 2021, and just raised a $25M B round to keep accelerating.

Promise works with government agencies and related organizations that collect anything from utility bills to license fees. Ordinarily payment processes for these are very rigid, and don’t account for fluctuations in income or free cash; Promise provides a plug-and-play interest-free installment payment plan for something like an electric bill.

“For people 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 instance, fail to pay your commercial drivers license fee on time and you don’t get the license, so you can’t work to get the money to pay for the license, or your gas bill, so you have late fees, and so on. In a time of enormous fiscal uncertainty, such inflexibility doesn’t really make sense.

Ellis-Lamkins explained that the old systems are based around the idea that if someone doesn’t pay, it’s because they don’t want to, and they are punished with fees and interest, or required to go to a predatory service like a payday loan outfit. Promise takes a different position.

“Our thesis is that structurally, they can’t pay — it’s not a choice,” she said. “If you build a system that works better for people, they will pay.”

This idea seems to be supported by the data: places where a majority of people lived with rolling government debt were suddenly paying it at rates above 90 percent. “The science of what we do is getting better and better,” she added. And governments have recognized that it makes sense to subscribe to a service that makes it far more likely that income will actually come in.

With $20M A round, Promise brings financial flexibility to outdated government and utility payment systems

We talked with Promise almost exactly a year ago when it raised $15M to expand operations, and expand it has. The year saw the company’s revenues and customers (that is to say utilities, not bill payers) increase by 32x and 45x respectively. And it said that just in the opening weeks of 2021 it has already booked multiples of those multiples.

I asked what that growth looks like. “It looks like adding child support, it looks like adding parking tickets — we have a pretty diverse client set,” she said. “We just want people to not face the negative consequences 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 really good at getting money out.”

As she explained, Promise’s direct interface with someone like a utility gives them insight into things like government subsidies or stimulus checks. For many, getting some money or discount that’s been officially allotted to them means filling out paper forms, providing tax records, and visiting a place in person — not exactly convenient even outside pandemic conditions. Government agencies know which people qualify but don’t alert them proactively — so Promise does on their behalf.

Image Credits: Promise

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. But like any bureaucracy, neither speed nor communication is their strong point. In a Louisville case study, Promise gave out 10 times what the local authorities had more or less by texting eligible people and saying “come and get it.”

A pleasant consequence of Promise’s work is it puts pressure on predatory lending and collection agencies that made their living off those struggling to get by. Few will be sad to see these unsavory business models reduced to desperate circumstances, like the people they target.

As it becomes clearer that you catch more flies (and bills) with honey, more local governments are signing up and paying the subscription fees that provide Promise with revenue; users aren’t charged. The $25M in funding will cover the hiring necessary to handle all these new customers, and, although Ellis-Lamkins declined to go into detail, expand the company into doing payments work for the Feds. That’s a big fish to land, and we can probably expect Promise to keep growing.

This B round was led by The General Partnership, with participation from Kapor Capital, XYZ Ventures, Bronze Investments, First Round Capital, Y Combinator, Howard Schultz and others.

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Ripple’s XRP price jumps 5% fuelled by Singapore licensing acquisition amidst crypto market downturn

Ripple’s XRP emerged as one of the rare gainers during a subdued 24 hours in the cryptocurrency market that saw Bitcoin (BTC) and other top digital assets…

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October 4, 2023

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Ripple’s XRP emerged as one of the rare gainers during a subdued 24 hours in the cryptocurrency market that saw Bitcoin (BTC) and other top digital assets lose their value.

Data from CryptoSlate reveals that XRP surged by approximately 5%, reaching $0.53018 as of press time. This uptick follows Ripple’s significant victories during the reporting period as it secured licensing in Singapore and Judge Analisa Torres rejected the U.S. Securities and Exchange Commission’s (SEC) plea for an interlocutory appeal.

Ripple’s Singapore licensing

Earlier today, Ripple said its subsidiary, Ripple Markets APAC Pte Ltd, secured a “full” Major Payments Institution (MPI) license from the Monetary Authority of Singapore (MAS) to provide digital payment token services in the country. The crypto payment country received an in-principle approval from the regulator in June.

The MPI license enables businesses to operate free from daily and monthly transaction limits. To qualify, the business must possess a Singaporean-registered company or branch, maintain a permanent business address for record-keeping, have a minimum capital of $250,000, and appoint at least one director with Singaporean citizenship or residency.

Ripple CEO Brad Garlinghouse described Singapore as a “progressive jurisdiction” that has ” developed into one of the leading fintech and digital asset hubs striking a balance between innovation, consumer protection, and responsible growth.”

Besides that, Judge Torres’s decision provides a closing chapter to the legal tussle between the company and the SEC for this year, with both parties scheduled for trial by April 23, 2024.

Selling pressure on the horizon

Despite this recent surge, XRP still confronts substantial selling pressure due to Ripple recently releasing one billion tokens from its escrow system.

Top 10 Assets by Market Cap. (Source: CryptoSlate)

While the crypto payment firm immediately relocked 800 million XRP, the company still holds 200 million tokens that could add more than $100 million in selling pressure to the market, potentially altering the current upward momentum of the asset.

The post Ripple’s XRP price jumps 5% fuelled by Singapore licensing acquisition amidst crypto market downturn appeared first on CryptoSlate.

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Blockchain finance to grow into $79.3B market by 2032

COVID-19 pandemic-induced disruptions in traditional finance, coupled with the promise to reduce operational costs set the stage for the mainstreaming…

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October 4, 2023

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COVID-19 pandemic-induced disruptions in traditional finance, coupled with the promise to reduce operational costs set the stage for the mainstreaming of the digital ecosystem.

The global blockchain finance market — encompassing public and private blockchains, trading, payments, settlements and asset management — is well-positioned to grow into a $79.3B market by 2032.

A report by Allied Market Research revealed that the blockchain finance market players are heavily exploring collaborations and acquisitions as a top strategy. COVID-19 pandemic-induced disruptions in traditional finance, coupled with the promise to reduce operational costs set the stage for the mainstreaming of the digital ecosystem.

The public blockchain sub-segment accounts for dominant market share. Source: Allied Market Research

In 2023, the public blockchain sub-segment represents the lion’s share of the type of blockchains being used worldwide. Bitcoin (BTC) and Ether (ETH) are some of the prominent crypto ecosystems that use public blockchains. Public blockchains come with numerous upsides, as explained in the report:

“Public blockchains leverage significant computational power, making them ideal for maintaining large distributed ledgers associated with financial transactions. These factors are anticipated to boost the blockchain finance market.”

When it comes to the applications of blockchain finance, cross-border payments and trading are two of the largest sub-segments, driven by the rising demand from individuals, enterprises, merchants, industries and international development groups.

The cross-border payments and settlement sub-segment accounts for dominant market share. Source: Allied Market Research

As shown above, the trend is expected to continue as users continue to seek cheaper alternatives to move their savings across the world. North America dominated the blockchain finance market in 2022 and is expected to maintain its lead for blockchain finance adoption.

Blockchain finance market report highlights. Source: Allied Market Research

Based on the quantitative analysis of trends and dynamics of the blockchain finance industry, Allied Market Research predicted a compound annual growth rate (CAGR) growth of 60.5%. Based on the estimates, the industry is poised to grow into a $79.3 billion market.

Related: Beyond finance and Bitcoin: How blockchain is disrupting secure messaging

A report recently published by digital payments network Ripple revealed that blockchain could potentially save financial institutions approximately $10 billion in cross-border payment costs by the year 2030.

“In the survey, over 50% of respondents believe that lower payment costs — both domestically and internationally — is crypto’s primary benefit,” the report notes. The statement complements Allied Market Research’s report, which bases its growth trajectory prediction on cheaper and safer alternatives.

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CBDC lays foundation for new global monetary system: French central bank

The first deputy governor at Banque de France calls central bank digital currency “the catalyst for improving cross-border payments.“
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October 4, 2023

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The first deputy governor at Banque de France calls central bank digital currency “the catalyst for improving cross-border payments.“

Representatives of Banque de France, the French central bank, have embraced the global perspective on the central bank digital currency (CBDC) discussion, touting it as the foundation of a new international monetary system.

On Oct.3, Denis Beau, the first deputy governor at Banque de France, called the CBDC “the catalyst for improving cross-border payments by enabling the build-up of a new international monetary system.” The official emphasizes the necessity of considering cross-border issue around CBDCs from the outset and not as an afterthought.

Related: Head of Portugal central bank deems crypto unsustainable, calls for global regulation

Beau sees several paths for developing a CBDC. The first is the development of common standards and interoperability between wholesale CBDCs and legacy systems. The second — promoted by the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) — is the development of regional or global CBDC platforms. Wholesale CBDCs could be standardized to be exchanged directly on these platforms and perform payment versus payment and delivery versus payment transactions.

Beau cited the example of Project Mariana, which explored the possibilities of an automated market maker (AMM). The project, involving the Banque de France, the Monetary Authority of Singapore and the Swiss National Bank, successfully concluded in late September.

The official talked not only about the CBDCs but also about the tokenization of finance. He expressed his belief that the public sector must support the private sector more to enable the full potential of blockchain while limiting the risks. In his opinion, tokenized “central bank money availability” and tokenized assets are allies rather than competitors.

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