A regular BNPL service allows a person to choose: pass on the opportunity to buy Unaffordable Stuff or pay for in for 6-12 months. The rational thing to do, of course, is to pass, but some customers do make the mistake of purchasing. The shop increases the conversion, BNPL startups make money, the world doesn’t become a better place.
Promise Pay, the American startup of the day, applies the same technical solution to a different situation. It helps people pay compulsory bills before the state – for example, fines. Some unfortunate person owes, for example, a thousand bucks to their home state – and doesn’t have it in their pocket. Not paying is worse for everybody. The offender stumbles upon penalties and additional problems, the police wastes time on beating out the debts instead of catching criminals, and there’s a reputational loss when you pursue, for example, someone with a condition.
Paying the fine in installments with Promise Pay, everybody is happy. The startup earns some commission. The person paid off without emptying their pockets completely. The state saves effort on fighting non-payers and earns a reputation of a friendly and innovative one. And even I cannot nitpick – the business is indeed useful and doesn’t harm anybody. This is unique for startups of this kind.
Promise Pay brought in USD 25M of investment and got valued at USD 0.5B. It’s funny to observe how these numbers are dissonant with the startups monstrously ugly website. It is apparently made for officials – its future clients, and they have their own understanding of beauty.
Translation: Kostiantyn Tupikov
Alexander made his career in Russian internet companies including Mail.Ru, Rambler, RBC. From 2016 to 2018 he was Chief Strategy and Analytics officer in Mail.Ru Group. In this position, he worked on M&A, investments, and new project launches. In 2018 he became Deputy CEO in Citymobil, a Russian Uber-like company that was invested by Mail.Ru Group and Sberbank (the biggest Russian bank), then he left the company to launch his own projects. Now Alexander is a co-founder of United Investors – the platform for co-investments in Russian early-stage startups. His blog #startupoftheday (#стартапдня) is one of the most popular blogs about startups in Russia.