Inside payments fintech Highline’s auto expansion plan

Payments fintech Highline Technologies is looking to expand into auto loan payments on the heels of raising $13 million in series A funding this week. Plano, Texas-based Highline, founded in 2020, is a platform that allows consumers to automate bill payments directly from their paychecks, helping avoid overdraft fees and transaction fails that would result in late charges while reducing default risk for lenders, co-founder and Chief Executive Geoff Brown told Auto Finance News . “We are a payments platform that enables lenders and other billers to get paid directly from their customers’ paychecks, putting bill pay on top of somebody’s income instead of from their checking accounts,” Brown said. “Fundamentally, checking accounts are messy places to manage bill payments. As a consumer, you've got to keep track of how much money is in that account for when bills are hitting.” Highline’s latest funding round was led by Jump Capital , Costanoa Ventures and Foundation Capital , according to a company release. The series A round follows a $4.5 million seed round led by Foundation Capital and Costanoa Ventures, according to a February release. Expansion plans The fintech will use the new funds to add to its engineering staff as well as fund marketing efforts and growth in other markets such as auto finance, Brown said. Highline’s platform historically has been used for personal loans but is applicable to any type of credit for which consumers make monthly payments, he noted. In the past year, the company has expanded into the lease-to-own, retail and credit card industries, according to the release. The fintech is actively working on expanding into auto and is in conversations with a few direct and indirect auto lenders and lenders in the auto refinance space, Brown said, noting the platform allows financiers to reduce default risk while expanding their borrower base. “You're approving based on somebody's career stability as opposed to approving based on what's on their credit report,” he said. “There are lots of people who have good , solid jobs, but not great credit. For that population, if you were fully embedded into the dealership, you could tell somebody ... you're approved for this much lower rate if you use this financing partner that you pay straight from your paycheck.” As of February, more than 40 million Americans were estimated to have “good jobs but have subprime or no credit scores,” according to Highline. The fintech’s total addressable market stands at about $3 trillion of annual bill payments, Brown said. Credit and auto loans represent the largest potential impact as defined by credit losses and collection expenses, accounting for an estimated $40 billion per year, he noted. “As a lender, if you want to serve [credit - challenged] communities, you're going to have to build more tools and more ways to lend to the communities as they are,” Brown said, noting banks have identified helping underserved communities get access to credit as a motivating factor in offering payroll-linked payments. How it works Employees grant Highline access to their payroll platform, making it helpful to underwrite loans since identity, income and bank account data are attached to a borrower’s payroll, Brown said. When the fintech initiates direct deposit for a borrower, part of the consumer’s paycheck is sent to Highline, which acts as a router, pushing the consumer’s bill payments through, Brown said. The money left over in the employee’s paycheck is then deposited into their checking account that same day. Highline is partnering with API platforms , such as employment data platform Argyle, and is developing direct integrations with payroll platforms, Brown said. The company is looking to add another five employees to its current 25 with the new funding, and will seek additional funding down the road, Brown said. Auto Finance Summit, the premier industry event for auto lending and leasing, returns October 26-28 at the Wynn Las Vegas. To learn more about the 2022 event and register, visit www.AutoFinanceSummit.com.

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Inside payments fintech Highline’s auto expansion plan

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