How Prism Tapped into the Complex Psychology Behind Paying Our Bills – And Made it Less Daunting
Have you paid all your bills this month? Do you even know? With an average of more than a dozen statements a month, falling behind, losing track, or simply getting overwhelmed by the many moving parts is a challenge countless Americans face when it comes to paying their bills on time.
“The average family spends about $400 a year on late fees and overdraft fees. Those fees tend to fall on the people who can afford them the least,” says Tyler Griffin, co-founder of Prism, a platform designed to simplify and streamline bill payment. Translate that on a national scale and those figures are staggering, with consumers paying more than $54 billion a year in combined credit card penalties and overdraft fees, according to the Wall Street Journal.
It’s precisely this challenge that Prism has set out to tackle. Initially, Griffin and his co-founder Steve Gordon, who met as freshman at Northwestern University, envisioned their startup as a way to make bill payment more convenient, much in the way online services like Seamless and Uber streamline tasks like ordering food and getting a ride. But the pair quickly realized that a more transparent and organized system for paying bills wasn’t just a nice-to-have, but rather a necessity for many Americans. “Paying a bill that doesn’t need to be paid two weeks early could be economically costly for many people,” says Griffin. “[Bill payment] is a surprisingly opaque space for many people.”
Launched in 2011, Prism is designed with the goal of dissolving that opacity. The application organizes a user’s many bills in one place, offering a visual graph to illustrate exactly what chunk of monthly income goes towards which bills, and enabling users to make payments directly through the interface.
Not long after Griffin and Gordon met as undergraduates, the two knew they wanted to launch a business together. But determining what precisely that business would be remained an unknown for nearly a decade. In the meantime, Griffin moved to New York and took at job at JPMorgan, working on mergers and acquisitions, while on the other side of the country, Gordon began working at Microsoft, where he focused on Hotmail. But in 2011, the two friends decided to finally hash out a business plan, meeting for what Griffin calls a six-day “summit” in Seattle, where they brainstormed ideas, finally arriving at the premise for Prism, which they launched within a few months.
From the very beginning, Griffin and Gordon have focused on building and evolving the product around customers’ specific needs. Early on, speaking with a man in his 50s at a Starbucks in Seattle, for example, they realized that rather than simplifying the bill payment process, the Internet had made it more complicated for many. “All billers treat this stuff differently,” says Griffin. While some bills post online, others still arrive by mail, and while some post right away, others can take a week or more to post. “This is the one place where technology has made my life demonstrably worse,” the man had told them. “You drown in the options.”
The founders took this insight to heart. They also began to realize the profound psychological toll bill payment had on people – the nagging sense that something was always around the corner, waiting to be paid off. “Just showing people all that information, providing that transparency, was a huge financial relief,” says Griffin. “They then felt permission to address those problems.”
Griffin and Gordon also quickly learned that people’s experiences with bill payment are incredibly individualized. While some users liked to see and pay their monthly credit card balance in full, for example, others felt burdened by the constant reminder of how much money they owed. As a result, Prism adapted its settings so each user’s interface is personalized to reflect individual spending patterns. For those people who paid their credit card bill in full, for example, the entire sum would be displayed, while those who chose to pay a monthly minimum saw an adjusted figure to help alleviate the “psychological weight of seeing large bills.”
“For years now, we haven’t made a single feature that hasn’t come out of a customer request,” says Griffin. But this customer-centric approach has also been a fine line to walk. “You want to give people the product they want, but there’s some element of social responsibility. You also want to give them the right information to make the best economic choices.”
Understanding the ins and outs of financial institutions and the regulator community has also been a critical part of Prism’s growth. Thanks to FinLab, Griffin and Gordon have met with top executives in the financial and regulatory sector. “Getting time from very senior, extremely intelligent people in the space has been most valuable for us,” says Griffin.
So, too, has meeting other startup founders working to help change the way people interact with and handle their finances. “I think consumers are going to be delighted with what’s coming out of the space,” says Griffin. “What you are going to see coming out of this foam of startups, is a shift in how consumers interact with their money.”
In early 2016, Prism was acquired by fintech company PayNearMe. “Bringing Prism’s functionality to PayNearMe’s extensive electronic cash payment network proved too exciting a temptation for either company to ignore,” said Prism co-founder Tyler Griffin. Since Prism’s sale, Visa has announced it will offer the combined companies’ suite of customizable bill presentment and payment processing capabilities to its enterprise customers, including Visa prepaid consumer reloadable card programs.