Fintech Repayment Solutions | Method

Challenges in Fintech App Development

Integrating features like repayment processing, balance transfers, and bill payment can present significant hurdles for developers creating fintech applications. Often, these developers encounter fragmented and unreliable screen-scraping APIs when attempting to access user financial data.

Alternatively, they may be forced to manage cumbersome processes involving physical checks and extensive paperwork. These obstacles can be particularly detrimental to smaller fintech teams, potentially hindering their progress.

The Launch of Method

Jose Bethancourt, Marco del Carmen, and Mit Shah – three entrepreneurs – shared with TechCrunch their experiences with these challenges. Driven to address these issues and assist others, they established Method, a platform designed to empower debt and debt repayment functionalities within fintech applications.

Shah explained to TechCrunch that Jose and Marco directly encountered the difficulties of financial account connectivity during the development of their previous venture, GradJoy, a startup supported by Y Combinator.

GradJoy focused on streamlining student loan management, but its founders quickly recognized the shortcomings of existing account connectivity solutions.

How Method Operates

Method utilizes protections for consumer credit access, as outlined in the 2010 Dodd-Frank Act. The platform integrates data from credit bureaus and telecom companies, alongside information from core banking systems.

This combination allows Method to consolidate an individual’s debts and facilitate balance transfers, bill payments, and debt payoffs on their behalf. Fintech developers can seamlessly incorporate this technology into their applications through Method’s API.

Users of these applications simply need to provide their phone number to access the functionality.

Growth and Current Status

Method officially launched in 2021, having previously operated in stealth mode. Currently, the platform supports over 30 million account connections for 4 million users.

To date, it has processed over $500 million in liability repayments.

Data Security and Privacy

Given the sensitive nature of the data handled by Method, concerns regarding privacy are understandable. However, Shah asserts that the company collects only the “minimum user information” necessary.

Furthermore, Method does not engage in the sale of user data to third parties. The company is also developing a user portal, enabling individuals to manage the data they have shared with Method’s customers.

Competitive Landscape

Method operates in a competitive market alongside established vendors such as Plaid, MX, Spinwheel, and Dwolla. However, Shah points out that many of these competitors rely on systems requiring users to directly input their financial account credentials.

He argues that this can create a point of friction for users.

Impact and Benefits

“Method is empowering millions of Americans on their financial journeys,” Shah stated. “It also assists lenders and fintechs, including SoFi, Aven, Happy Money, and Figure, in improving conversion rates through enhanced user experience and engagement.”

Consumers avoid repeated authentication processes for different accounts, and once liabilities are identified, they can be paid using Method’s payment infrastructure.

Future Developments

Method recently expanded its capabilities to include support for credit cards, powering Bilt’s credit card linking tool. This allows Bilt customers to earn points on qualifying purchases.

Looking ahead, Method intends to strengthen its banking relationships and introduce credit card network integrations for retail and travel customers.

“Many customers are hesitant to store their card details or dedicate time to the process,” Shah explained. “Method offers shoppers a view of their existing credit card wallet – encompassing all active cards – simply by providing their name and phone number.”

This approach gives merchants greater control over the checkout experience and provides a comprehensive understanding of customer spending habits.

Funding and Investment

To support its continued growth, Method, a 35-employee company based in Austin, secured a $41.5 million Series B funding round. Emergence Capital led the round, with participation from Avra Capital, Samsung Next, Andreessen Horowitz, Y Combinator, and Ardent.

This new investment brings the company’s total funding to approximately $60 million.