IE 11 Not Supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

Payment Tech Startup Promise Tackles Utility Billing

As residents struggle to catch up on water and other bills, this young company — in which Jay-Z has invested — is touting its payment software. With inflation rising, Promise wants to help reduce utility shut-offs.

As state and local governments try to get past the pandemic, officials face the work of catching up on delinquent utility payments — all those dollars owed to them by residents who lost income and savings during the COVID-19 outbreak.

An Oakland, Calif.-based software-as-a-service company called Promise is positioning itself to help officials with that massive task, part of the trend of governments getting more digital with payments.

The technology firm — which gained a bit of the spotlight in 2018 when hip-hop artist Jay-Z’s Roc Nation took part in the $3 million funding round for Promise — wants to tackle the problem of the estimated $22.3 billion in delinquent utility payments nationwide.

In New York and New Jersey, those past due utility bills top $2.4 billion, according to a recent report from the New York Times, further illustrating the scope of the issue.


When it comes to those payments, Promise helps residents behind on their bills craft repayment plans and access aid programs, and in ways that can often be nimbler than normally associated with public agencies, Promise co-founder and CEO Phaedra Ellis-Lamkins told Government Technology.

“COVID showed that people are behind who were never behind,” she said. “There are more people behind than ever before, and public agencies don’t know how to deal with it.”

At the height of the pandemic, as many as 20 percent of U.S. households were behind on utility payments, according to the National Governors Association. Those households often received aid or assurances that services would not be cut off.


Times have changed.

Battered by the long-term impact of pandemic job losses and past-due bills — and now inflation — utility customers in arrears face the expiration of those cut-off moratoriums and increasing demands to catch up with payments.

Governments, for their part, need the revenue owed to them, especially given the decreased tax receipts during the pandemic.

But doing so often involves late fees and other costs for customers, along with inflexible payment dates and options. As well, public agencies are not always equipped to offer the flexible payment options common in the private sector, Ellis-Lamkins said.

“The private sector has learned that if you want people to pay you, make it easy to pay,” she said.

Promise’s clients are governments, and the company’s technology is designed for such tasks as crafting interest-free utility payment plans and getting utility aid out to residents more quickly than agencies can do on their own.

Washington state, for example, has a list of 73 programs for electric and natural gas utilities, according to the National Governors Association — and it’s the goal of Promise to make sure agencies can get that aid to customers before, say, it expires or otherwise disappears from the budget.


The company makes its money via fees charged through its software-as-a-service platform and rewards for achieving specific bill repayment goals.

According to Ellis-Lamkins, about 90 percent of residents who take part in Promise-enabled programs end up paying back their debts. She said that after the company started working with Louisville Water in Kentucky, more than 20,000 residents received help with keeping on their water.

Governments also can use the company’s software for tickets and other fees and bills charged to residents that often go unpaid.

While public agencies often do offer their own payment plans for such debts — especially when it comes to traffic tickets or other citations — those plans typically require that a debtor have a certain level of debt before enrollment is allowed, she said. That level of debt is often larger than the original fee. Such debt can also come with penalties such as suspension of drivers’ licenses.

Back in 2018, when Jay-Z was part of that investment round, Promise was focused on bail and related parts of the criminal justice system, using its technology to help keep people charged with crime out of jail via support related to monitoring and treatment obligations.

While “Promise is no longer closely involved with Jay-Z,” said Ellis-Lamkins, the company remains active in criminal justice, using its technology to help with repayments in that area.


The ongoing goals of Promise — whether in justice, ticketing or utilities — fit into the broader trend of state and local governments turning to ever more digital tools for payments.

The digital transformation is not only happening with water utilities — just moving to the cloud has proven effective — but also involves social media and cryptocurrency. Tech upgrades can even help governments catch up with delinquent vendor payments.

Utilities also are turning to installment or income-percentage plans — a trend that would seem to bolster the Promise value proposition. For instance, The National Governors Association said that various types of those programs are in place in such states as Colorado, Illinois, Minnesota, New Hampshire, New Jersey, Ohio and Pennsylvania.

For Ellis-Lamkins, the underlying theme of Promise’s utility payment plan is an optimistic view of human nature even in these challenging times.

“The biggest lesson is that people want to pay off their government debts, and most systems are designed punitively,” she said.
Thad Rueter writes about the business of government technology. He covered local and state governments for newspapers in the Chicago area and Florida, as well as e-commerce, digital payments and related topics for various publications. He lives in Wisconsin.