After posting Thursday about my conversation with Bill at Upromise Investments, I received an e-mail from Alex, a Vice President at Evolve Money, who wrote that he was reaching out "to chat with you regarding our product and why we think it is the perfect solution for your readers.”
How could I turn down an offer like that? We spoke for about 40 minutes Friday morning, and Alex shared some interesting information about Upromise Investments, Evolve Money, Evolve's parent company PreCash, and what seem like some pretty exciting developments currently in the pipeline.
I wasn't able to get this post up in time (CRJ, no leg room, etc.) and Alex himself scooped me, posting some of the same information in the FlyerTalk thread about Evolve Money. See that thread for ongoing developments.
Alex is a marketer, so our interview has been heavily edited for length and repetition. Also, Alex is a marketer so don't take anything here or elsewhere as gospel; this is what a highly-placed employee of Evolve Money wants us to believe, nothing more and nothing less.
Finally, the interview is still very long, and it's gonna take up a lot of space on the front page of the blog until it rolls off in a week or two. My apologies in advance.
FQF: I saw you were contacting me after I wrote about my conversation with Upromise Investments. Before we got to talking about anything else, I’d like to know what your reaction was when you saw that this company was targeting your customers just because they were doing business with you?
Alex: Actually it’s not as negative a view as you would think. We have actually been talking to Upromise now for a few days as well. We as a company are trying to enable our customers to make as many payments as they can to all of the bills they want to pay with whatever source of funds they want to use. That’s sort of our philosophy. We want to make bill pay simple. Simple not just from the app or the online solution being simple, but also in terms of, you know, you’ve got a couple gift cards in your drawer, use those, you’ve got a debit card, use that one, etc. and I can talk about that in a minute.
So obviously when we started seeing this behavior around churning 529’s, we actually have quite a few legitimate customers that are paying into their 529’s like they would through their bank account. It’s usually once, twice a month, and they’re completely legitimate. I don’t mean legitimate like it’s illegal to put so much in and pull it out, but from our perspective they were using it as the service was intended.
Obviously Upromise reached out to us and we’re in the middle of – I mean I can’t share too much – but we’re in the middle of talking to them about sort of figuring out a way for us to make this work so our customers can continue to pay their bills. Our goal is not to shut all this down. Our goal is to educate our customers and let them know that churning dollars through 529 accounts is honestly not something they want to be doing. We’re actually in the middle of writing a blog post about it and getting tax advice because it actually has massive tax implications in certain states and so we really want to educate our customers, that’s really not something they should be doing, it’s not good for them, it’s not good for us, it’s not good for companies like Upromise.
And by the way, one of my colleagues talked to Bill at Upromise and they’re a great organization. Personally I’ve participated in Upromise for years now as well, they’re a great organization doing great things. They just ended up with a new headache and they’re trying to find a way to get rid of it or not get rid of it but make sure that it’s not something that’s causing any major concerns in terms of their business model, our business model, and obviously anything related to regulatory.
FQF: I agree that Bill is a very charming guy. I guess my next question is what responsibilities you think you have to your customers if you know that it’s precisely your customers who are making precisely these payments who are being targeted by Upromise, what do they need to know up front before you process one of these payments for them?
Alex: At the end of the day if somebody has a 529 account and they want to pay through Evolve Money to put money in the 529 account, that’s perfectly fine with us. If they want to use their debit rewards card, great, if they want to use cash, fine, if they have a couple gift cards lying around, great. We have absolutely no problem with that model at all, and I want to talk to you about that in a little bit because I know, I’ve seen especially on your blog and others a lot of people sort of worry that we’re gonna shut them off because they’re using gift cards and we’re not going to do that, that’s exactly against what we’re trying to build.
But we do have to make sure we’re not allowing our own customers to put themselves in a position where either we or another institution like Upromise has to report them to some sort of agency, right? It’s only in very rare cases that happens, and then you end up with frozen accounts, and all sorts of not-pleasant stuff.
From our point of view we’re gonna try to educate our customers, so part of me talking to you is exactly that, is trying to reach out through different avenues. We use our blog a lot, we are building out our social media presence but we’ll be using that as well
FQF: I saw that you created a Twitter account but you haven’t posted any tweets yet.
Alex: We haven’t, and honestly even though PreCash, the parent company of Evolve Money, has been around for 15+ years, Evolve Money itself, which is our consumer wing of our business, has only been around since November. We were in a sort of Beta in October and September but really it’s been November since we’ve been actively marketing and acquiring customers.
Ultimately you’re gonna see us put a few more controls in place around paying things like 529’s. We want you to pay it. If you need to pay it 4 times a month because you’re trying to make installment payments every week, that’s great, we have no problem with that, but if you’re paying 20 times a day soon enough the system’s gonna tell you, “mmm, you can’t really do that.”
FQF: Ok, so we’ve talked about the Upromise situation, let’s pull out a little bit and talk about Evolve Money and PreCash in a little more general terms. You mentioned the use of multiple gift cards, that’s something a lot of people are concerned about, I have seen reports of people who have been locked out of their Evolve Money accounts, they weren’t sure why, so I can’t say it was because they were using multiple gift cards, but could you say just a little bit more about that, about people who are trying to drain gift cards or prepaid cards just to get rid of the balances?
Alex: Yeah absolutely. Let me actually tell you a little more about how we do payments. A lot of people ask, “how do you make money?” Well, we’ve been at the bill pay game for a while. We are actually a company driven by technology and innovation. We’ve built out our system in a way that allows us to deliver bill payments cheaper than absolutely any other person, any other company, in this country. And we have patents around that process, so we’re the only ones who can do those things. It allows us, where other companies and banks, it costs them, so the bank will usually pay somewhere between $50 and $60 a year per every customer who uses their online bill pay service, on average, for us the cost is significantly less. And so our model really is predicated around the ability of us to build our same-day express payments, that as you know are $1.50. It’s also predicated around the fact that as we gain customers we will have [unintelligible] monetization effort.
I want to be very clear about what I perceive as monetization. It’s not advertising. It is value-added services where we give our customers something of benefit. We may be giving them the ability to switch their cable company and save money, or we may be giving them the ability to get a better mortgage rate.
FQF: So "right now you’re paying Cox Communications, but you could be paying less if you were paying your Verizon bill instead,” something like that?
Alex: Yeah, something like that. That’s not a new model, companies like Mint use the exact same model. The difference for us is that we’re focused on bill pay. We’re laser-focused on bill pay. We want to be the absolute fastest, easiest, most convenient way to pay your bills. Period. Part of that philosophy includes the fact that we want to let you pay your bills whichever way you want. We’re the only solution out there that allows you to pay 10,000 bills with cash.
When you talk about other companies that say “oh, we’re seeing a lot of people using gift cards to pay,” they have a cost model around bill payment. Bill payment to them isn’t really their acquisition method. They’re trying to get you because you are a good paying customer, there’s some other behavior you’re doing as a customer that they want.
We want you to pay bills. For you to do that with a gift card, sure, it’s a little more costly to me, but that doesn’t matter, it’s perfectly within our model. So, the same thing with debit rewards cards. Actually, it’s funny because I was just reading your blog yesterday and I noticed that you were saying that PayPal wasn’t honoring your rewards.
FQF: That’s right.
Alex: But it wasn’t necessarily telling you whether you were or not…all of our transactions are absolutely signature payment transactions and they are meant to generate rewards. We are actually set up specifically so that debit rewards cards will work.
FQF: My suspicion is that PayPal has manually coded those transactions, because they know you exist, I’m sure.
Alex: Yeah they do. They’ve known of us for a while now. PreCash in general. The payments space is a very small space. We’ll reach out to those guys, if I remember correctly the PayPal MasterCard is run by Netspend which is another payments company, so we’ll reach out to those guys and try to figure it out a little bit. [editor's note: Alex appears to be talking about the PayPal Prepaid Debit MasterCard, which is run by Netspend]
Our goal really is if you can go get a debit rewards card, that you should be able to get your points for it. We have employees at our company that have, I’ll give you an example, we have a person who works on my team, their parent is a teacher and they’re a part of a teacher’s credit union that gives reward points. They’re using that card, and they’re happy doing it, and they get points back. Honestly the credit unions don’t mind it at all because bill payment is a cost for them. And whenever you use their card to do a signature transaction they make money.
FQF: Well pass my blog along to your team member, I’m sure they’ll find all sorts of interesting information there!
Alex: Believe me, I think everybody in our company has read every single post you’ve made by this point.
Ultimately my goal today was to chat with you about what we’re doing and why. I don’t want anybody out there to start worrying about, “oh, you know what, I just used my Chase card to buy a gift card because I get points on my Chase card, and now I’m using my gift card to pay my utility bill on Evolve Money.” Honestly, I prefer not to know all the details about that, but there’s nothing wrong with that from our perspective.
FQF: Let me change the subject just slightly because you have said that this is the new, consumer-facing product and it’s just rolled out in November. So I have 2 questions you can answer in either order, or neither of them, but the first question is are you guys getting the consumer-facing website into the shape that it needs to be in? Right now the search function in particular is something that is not a 21st century search function, the fact that it’s a linear list, that you can’t click on the next page of links, that you can’t narrow your search in any way, it’s very primitive search function.
Alex: Yeah, I agree with you, and that’s actually a part of my job. Sometime in May, you’re going to see a completely redesigned site. Some of the areas we’re going to be addressing, I’ll give you a perfect example: today if you wanna pay your AT&T wireless bill “standard,” we have a lot of “standard” payments that are tomorrow, that are next-day, which is faster than any bank, but we still call them “standard” and they’re still free, so if you want to pay your AT&T bill “standard” which is tomorrow, you add your AT&T “standard.” If you want to pay your AT&T “express,” which means today, you add your AT&T “express,” so there’s really 2 different accounts you have to add, and that’s redundant.
So in May you’re going to see a whole new release that allows you to just add your AT&T wireless account and at the point you are going to go pay it you can decide if you need to pay it today or if you can pay it tomorrow, and if you want to pay it today you’ll add the extra $1.50. So things like that are gonna get cleaned up.
The search is a little bit harder. The issue we have is that we have over 10,000 different billers, and the problem there is that a lot of times you have billers that are in our system appear under one name and consumers may know them as another. So I’ll give you an example. In Colorado Excel Energy is one of the major companies, however they bought out a Colorado energy company so the most part of the marketing is still in that old company’s name but in our databases of accounts that doesn’t show up.
So we’re in the middle of addressing that. There are gonna be two changes you’re going to see: in the near term you’re gonna see a design change that’s gonna be a lot more aligned with iOS 7, a lot cleaner look. And then in May you’re gonna see a lot of new functionality.
In May there’s gonna be the ability to schedule your payments.
The search is harder for us. We’re going through a project to categorize billers by region so that when you first go to search the ideal thing is it recommends the top 10 in the area you’re in.
FQF: Well literally any change is gonna be an improvement to the text list that the site spits out now.
Alex: We’re with you. We are iterating as fast as we can.
FQF: My final question, and then you can share anything else you want to share with me, is that I am terribly curious about the process of selecting which billers are in your system. I’ve heard a lot of reports of people just e-mailing in and saying “my biller isn’t in your system, can you add them?” and then you very promptly reply and add them, but I’m wondering is it a technical problem or you’re just waiting for people to suggest new billers to add. The subquestion to that is obviously, everyone want to see credit card companies added to the list, so we’re wondering what the logistical or legal or technical problems would be with doing that?
Alex: Those are great questions and I anticipated both of them. Let me answer the first piece of that, which is how we deal with billers. We have access to over 10,000 billers. Some of them are directly, so we have a lot of relationships with the billers. Some of them are indirect, so we have a relationship with another group that has a relationship with the biller. That’s very much how bill pay works. If you pay your bill pay at your bank, there’s probably 3 or 4 hands in that cookie jar. And we obviously are trying to simplify that, that’s one way we make payments cheaper by taking a lot of those hands out of the cookie jar.
The truth of the matter is that 6 or 7 out of every 10 requests to add a biller that we get, is really a biller we already have, but somebody knows it under a different name. What we do is when we identify that, we have a group of product researchers that identify that, and then they figure that out, and they basically add the same biller with another name.
So on our back end you may have 3 or 4 companies that just get sent to the same place, in terms of bill payments, but they operate under 3 or 4 or 5 different names. Comcast for example is really bad that way. There’s 255 entities that are considered Comcast.
In the next week you’re gonna see us announce a lot of top-up billers. Topping up your AT&T GoPhone, you’re gonna see a lot of those guys, the wireless top-ups. Towards the end of the month or early in March you’re gonna see us announce 550 new billers that we’re gonna add.
The exception, and it’s because of regulatory reasons, is that if you want to pay someone else, kind of like the banks let you do where you can designate somebody just adding their address and the bank basically cuts a check to them, that is a functionality that we will never really have, because we allow you to move money with cash, we allow you to put cash into our system, that is something that from a regulatory perspective can’t be supported.
Let me move on to your second question, and it’s definitely a lot more what the users are looking for. The good news is that yes, we are going to be adding the ability to pay your credit card. The not-so-good news for your readers, although I still actually think it’s good news, and it’s probably just a handful of your readers that aren’t going to like it as much, is that we are going to have to limit what sources of payment – that’s the only type of bill where we’re gonna have to limit what sources of payment you use. Gift cards are gonna be off the table for that.
But if you want to pay your credit card with your debit rewards card, you’ll be able to do that. If you want to pay with your standard debit card, you’ll be able to do that. We are still not sure about prepaid debit cards; we’re still looking into that. In terms of using gift cards to pay credit cards, the concern there is that there would be too much churning of that. Unfortunately for us, we have very good relationships with all the credit card companies and that’s just not something that as a company we’re able to enable.
The easy answer is ‘yes,’ that’s going to be added sometime in the middle of the year. It will be limited though in how you can pay those.
FQF: Let me tell you that is terrific news. I don’t think anyone is going to be terribly surprised by that restriction. You’re gonna earn a lot of customers and a lot of good will that way.
Alex: That has always been our plan. To be honest, we would have probably done it sooner, but we are absolutely taking our time with this because we need to make sure that everything we do has 17 layers of security. Our CTO would say 50 layers of security. The moment you take credit cards for payment you’re taking a credit card number, and as our friends at Target learned that’s a scary thing to do. So the reason you’re not seeing it until the middle of the year is more because we are doing and testing every check and balance possible to make sure that that information is secure and safe.
Not that information isn’t today, but just that credit card numbers are gonna be under additional lock and key.
FQF: I do think that the redesign of the site can’t come soon enough, for precisely that reason, that people come to the website and it’s not 100% clear that there’s 17 layers of security around your account numbers.
Alex: That’s part of us in terms of marketing as well. At the end of the day we actually process payments across all our business lines, not directly to the consumer but across all our business lines for over 3 million customers on a monthly basis, we move about $3 billion worth of bill payment every year. We’ve been in this space, we’re pretty big in it, we’re pretty secure as a company.
Evolve Money is our consumer brand, we want to make sure it has its own life, that it doesn’t get necessarily completely tied into PreCash as a brand, because the name PreCash doesn’t really tie into what we trying to do with Evolve Money, but we make reference to PreCash and we make reference to the security, and part of our marketing is actually to beef up what we say about it.
We really feel that your readers are the type of customers that are really our best customers, at the end of the day most of them - a few of them are grabbing their 529’s and just throwing a lot of money through them - but most of your readers are just paying their mortgage, they’re paying their gas, their electricity, their water, their cars, their wireless phones, their cable, etc., which are all exactly what we want, we want people to pay every bill they can with us.
The last thing I wanted to sort of leave with you is one more future roadmap, and I wish I could give you a date on this, but I can’t, but one thing we’re going to add in the future, is the ability for you to use your credit card to make payments. Unfortunately, we’re gonna charge for using a credit card.
We’re gonna be extremely aggressive about how low we try to keep that fee. We’re not gonna make money from that, we’re just gonna make sure we can cover our costs.
FQF: Exciting stuff. A lot of my readers thought that if you knew what was going on, then the gig would be up. I’m glad that we spoke and that I can pass along this information.
Alex: That’s exactly why I wanted to reach out to you. We have kept semi-quiet, because there’s been no reason to reach out to anybody, because we’re not seeing anything wrong. But after you talked to Bill I decided it was a good idea to get the word out, “the gig’s not up,” we like what you guys are doing.
I would leave you with the parting shot that Bill left you with, which is, “this is great, just try not to abuse the system. 20 payments to a 529 every day or finding other ways to sort of churn money and manufacturing spend aren’t beneficial to anybody, even the people who are actually doing it to get points, at the end of the day, if they do it too much, whether it’s through us or through the institution that they’re doing it with, they’re gonna end up on a list somewhere.”
We tend to give people the benefit of the doubt but I can’t say the same for the banks and credit unions and 529 accounts in terms of submitting that information to federal agencies.
FQF: Let me leave you with a note as well, as you’re rolling out your social media team, on FlyerTalk there’s a very lively discussion of your company and I think it would benefit from having a company rep chime in every once in a while and share your take on things, just because right now there is a sort of persecuted, siege mentality over there and I think it might cut through some of that tension if someone were to pop on and tell everybody not to worry, if you told them the same things you’ve told me.
Alex: Absolutely. We plan to. Honestly, we have a lot of good guys here who have done a lot of consumer marketing and, you know, our first step was always to sort of look at the ecosystem and figure out what people do with the information they have, and what their thoughts are and we wanted to make sure that people felt like they could share without feeling like we were watching. So your comment about the search for example is repeated over and over and over and we have actually taken that from the blogs and posts and have prioritized addressing it.
We’re sort of keeping an eye on it mostly because we want to learn more about how people interact with our product without us sort of sticking a finger in the fishbowl and swirling the water. So now that I think we’ve done a lot of that and we’ve learned a tremendous amount and I completely agree with you and I think you’ll see in the next week or so that our social media team is gonna start being more active both on Facebook and Twitter and start engaging with this community.
FQF: It’s funny you say you want to see how people engage with the product because as you can see from the forum, how people engage with the product is typing in slight variations of their biller over and over again trying to get it to show up on the first page.
Alex: It’s one of the things that sort of backfired a little bit. The technology behind our search is an intelligent search algorithm. It takes into consideration the billers that are used the most and if you’re writing something close to that biller it tends to return that biller because it has weight.
If you had a biller that was “commercial lending” and you write “com,” you’re gonna get Comcast every single time. Because 99% of the time people type “com” they’re looking for Comcast.
At the end of the day I think it’s backfired a little bit in that everybody can find Comcast, and people aren’t having issues finding Comcast, or any of the national guys, DirectTV, Sprint, those guys, but we’re seeing people have issues with their water company. All the little guys that are in our system somewhere but aren’t showing up on that first page of results.
We are absolutely reengineering how that works and splitting it into “here’s an alphabetical list you can sort through” and “here are our recommended ones based on the fact that when you type ‘com’ these are the top 10 that people usually pick.” That’s an approach we’re gonna take with it.
In May along with scheduled payments you’re gonna see recurring payments.
FQF: People have really appreciated the mortgage companies that are in the system, that has been a real godsend for a lot of people who have been writing checks every month.
Alex: For us that’s one of the key elements. At the end of the day, to be honest with you, mortgages are expensive for us to process, but we think that offering them is how we get customers. Most people, the first payment they think of is their mortgage, and if you can offer that then they’ll come and give you the rest of their payments. So far that’s proved true for us. We are excited about that. We’re continuously looking for more and more companies we can pay.
FQF: Thanks for reaching out to me, if there are any final thoughts you’d like to share with my readers, I’ll give you the same chance I gave Bill.
Alex: I won’t even go down the path of “please don’t abuse us” because I think I got that point across. I’ll just say, “everybody’s welcome." We built this for people like your readers, and we want to hear more. We have feedback forms on our website, we have feedback forms in the app, if they think of anything that they think should be different, the search we know about, but if they think they have a way they think the search should look, please tell them to reach out to us. Either directly through the feedback forms on our app or our website or even through our Twitter feed or Facebook page, or even e-mailing us directly at our Customer Service.
