Highline, a payroll-linked bill payment method, launched this week with $4.5 million in seed funding led by Foundation Capital and Costanoa Ventures. The company said its goal is to enable Americans to take control of their finances based on their income rather than their credit score. By linking their bill payments to their payroll – versus the current bank account standard – more people can pay their bills on time and in full, which then enables them to access better credit rates and reduce unnecessary fees.
In a statement, Highline said more than 40 million Americans have good jobs but have subprime or no credit scores. These Americans can be part of lower-income families with little financial cushion, or earners who for various reasons fail to pay their bills on time. The burden of juggling money with bills and daily expenses can lead to potentially costly mistakes.
“The majority of Americans are living paycheck to paycheck, resulting in negative consequences like overdraft fees and missed payments,” said Geoff Brown, founder and CEO of Highline. “Highline believes access to better financial solutions begins with reimagining the broken bill payment system.”
Highline’s founding team includes COO Darin Cline, who was a founding team member at Marcus by Goldman Sachs; and Brown, who most recently was head of credit risk at Salary Finance (payroll-linked personal loans) as well as head of pricing at Santander.
“The vast majority of the US consumer lending industry has sought-after payroll-based lending at one time or another,” said Zach Noorani, partner at Foundation Capital. “But until Highline, it’s simply never been possible to do without selling into each employer individually. This is a huge step forward in terms of credit risk innovation.”
Highline is building direct access to payroll platforms through APIs. They help consumers make sure their bills are paid on time and in the right amounts by automatically routing them from their paychecks. Consumers avoid overdraft and late fees, gain peace of mind their bills are being paid on time, and get access to better credit terms, regardless of their credit history.
The company also helps billers and lenders reduce their collection expenses, credit losses, and customer churn, enabling them to offer lower interest rates to more people.
“Highline’s approach can play a major role in creating more financial inclusion,” stated Amy Cheetham, partner at Costanoa Ventures. “Millions of Americans have long been in need of low-cost credit options, and Highline’s experienced team is uniquely positioned to do it.”