That's a very interesting use case. We'll have to explore more the limitations of H1 payments, but this could be a way to receive "payment" by directing it to your bills / debts.
That's really interesting perspective, I had no idea that's how it worked in NZ. I suppose it works seamlessly in NZ as the loans are originated by the the NZ government. Could be interesting if student loan services in the US offered a BPS discount if the payment auto deducted from a paycheck.
Ultimately it depends on the type of debt. Some people carry credit card balances with 20% APR, so in that case is much better to pay off the balance on the credit card when compared to market returns.
I hate that you faced the exact same issues we did. It's definitely a huge pain, especially for startups trying to innovate in the space. Our goal is to make it easier for everybody from solo developers all the way to the huge incumbents to interface with debt.
They don't. Plaid is able to retrieve all the data about a debt using the user's credentials and that's about it. Most of our companies / developers use Plaid as their data source and Method as the payment rails.
Definitely #1 (and #2 to an extent) is a straight forward solution. We have seen some interest in #3, but mostly due to the gratification of getting your debt paid down without you thinking about it. We are working companies that offer employee unique employee WFH perks such as mortgage repayment or electricity repayment as a benefit.
Some other verticals that we have seen benefit from direct connections to debt include: Lenders (Personal loans, credit cards, mortgages) and Fintechs (BNPL, Crypto, PFMS)
Not right now, we are focused on B2B and enabling other developers to build on top of our platform. Our goal is to build the pipes and promote new breed of debt focused fintechs. We are working with some stealth fintechs solving both of the ideas you mentioned!
Method Financial (YC S19) | Engineering, Sales, Leadership | Full Time | Austin, TX or Remote | https://methodfi.com
Method is a developer-first API that makes it easy for developers to embed debt repayment on their apps.
Method works with over 2,000+ financial institutions enabling payments to any type of consumer debt – including credit cards, student loans, car loans, and mortgages – all through a single API.
We backed by Y Combinator, top investors including Ardent, Live Oak VP, and Leonis Capital. We're also backed by founders and leaders of Truebill, Upstart, Earnup, and Goldman Sachs.