Sramana Mitra: It’s a bit misleading to say that you are helping consumers get out of debt. It sounds like you are paying off their debt. Now that I understand what you’re doing, you’re basically managing the payments in a software environment.
Matthew Cooper: That’s the whole point of the application. Today, we have over $10 billion in loans that are managed on the platform. What we have been excited to see is that over 30% of consumers show reduction in missed payments.
The first step to getting out of debt is making your payments. A lot of Americans miss payments and accrue late fees and get behind. That first step is to help the customer make the payment. Over 80% of the consumers using the EarnUp application start to make extra payments on their loans.
They’re not just making the minimum payment over time but start to make extra payments to pay off their loans. If you can provide an easy environment for consumers to stay on track and manage payments, consumers pay back the loans faster.
That’s the driving force. It’s simplifying the daily financial experience for consumers and helps them get ahead. For hundreds of thousands of users that are using the platform, that is the case.
Sramana Mitra: How many consumers are using your app to manage their debt?
Matthew Cooper: We have over $10 billion in consumer loans that use the platform on a monthly basis to make payments. That’s a whole mix of auto loans, credit cards, and mortgages.
Sramana Mitra: I’m trying to understand the level of penetration of this kind of technology. Do you have competitors in the market that are doing this?
Matthew Cooper: There have been some that were unsuccessful. There was an application called Mint. They had a product called Mint Bills that aspired to help consumers do bill payment in a digital environment. It was not successful. There are more niche players, but they are not doing overall bill payment.
One example would be Plastiq, which is dealing with credit card payments. They have a B2B focus now. There’s also Chase. It’s not exactly the same thing. You can’t aggregate your loans to one platform, but in terms of the features, you can now use those features.
Chase tends to be one of the technologically advanced big banks in the US. We’re still fairly early in redefining the way consumers interact with their loans.
Sramana Mitra: How many consumers are in your target market?
Matthew Cooper: Consumers in our target market would be all the paycheck to paycheck consumers, which would be about half of the consumers with debt. That will be 100 million Americans. 200 million have loans and half are living in a paycheck to paycheck environment.
Sramana Mitra: What percentage of the 100 million in the United States are using technology of some sort to manage their debt?
Matthew Cooper: About 70% of Americans have used some type of online interface to manage their payments. The other 30% are still doing everything offline. Most consumers go to each biller website every month and make a payment. The minority of them would set up automated payments, but the vast majority are doing one-time payments each month.
Part of the benefit in the bill centralization is that you can provide an environment that allows people to do all of those activities in one place and get people to automate those activities instead of taking those individual actions. We’ve seen a huge amount of excitement that we can do that.