Evolve Money talks

Evolve Money is an online service that allows free bill payment with debit cards (including Visa and MasterCard gift cards) that can’t usually be paid with a credit card.  I first wrote about Evolve Money in the post “Pay bills online with debit and prepaid cards.”  Last week, in the post “Evolve devolves,” I wrote about a rash of “shut downs” with Evolve Money.  People have been receiving emails in two forms:

1. Biller shut down permanently.  Emails from Evolve Money stated: “your account with this biller at Evolve Money has been closed due to the volume processed.”
2. Biller shut down for the month.  Emails from Evolve Money stated: “your account with this biller at Evolve Money has been suspended due to the volume processed, there is now a 4 payment limit on this account per month.”

In last week’s post, I speculated about what was going on, but I didn’t yet have confirmation from Evolve.  This week, I had the chance to speak with a well informed source at Evolve.  Here’s what I learned…

Biller shut down permanently

Evolve has a risk review team that looks for unusual activity.  They examine many factors including size of payments, whether or not multiple Evolve accounts are paying to the same biller account, frequency of payments, etc.  When the team identifies a risk, they manage it by shutting down the ability to pay that specific biller account.  My source specifically told me that trying to circumvent the $1000 per day limit is a red flag that will likely lead to this shut down.

I asked my source about people who were shut down when using Evolve to legitimately pay large mortgages or to pay down loan principal.  He said that people in this situation can contact Evolve support (email: support at evolvemoney.com).  If those individuals provide documentation proving that the bill payments were legitimate, their ability to pay those accounts will be restored.

Biller shut down for the month

As I speculated in the my earlier post, this is simply due to new rules that Evolve has implemented to protect against abuse.  The new rules are:

• For each unique account that you pay via Evolve (such as a car loan, for example), you can make no more than 4 separate payments per calendar month.  I’ve confirmed that it is calendar month.  So, it should be possible to make 4 payments near the end of one month and then 4 more payments at the beginning of the next month.
• Even if you and your spouse have separate Evolve accounts, no more than 4 payments per month can be made to the same biller account (e.g. to the same car loan).
• If you have multiple accounts with one biller, you may make up to 4 payments per account.  For example, if you own two homes and have mortgages on each with the same bank, you can make a total of 8 payments per month to that bank: 4 to each mortgage account.
• As always, each payment can be no more than $999.
• As always, each biller account can be paid no more than $1000 per day.
• Payments made with “cash” (via EVOLVE Pay Bucks™ or RELoadit™ Pack) are not subject to the 4 payment per month limit. 

If a person makes four or fewer payments in a calendar month, they won’t receive any notification about the new rules.  When a person tries to make their fifth payment to the same biller account, though, they’ll get an error message on the screen and an email informing them of the 4 payment limit.

More news from Evolve

In addition to getting more information about the recent rash of Evolve Money shut downs, I learned a number of things about their business model and future plans (all of which is consistent with the interview previously posted by The Free-quent Flyer):

How Evolve makes money

Here’s what I was told: “Evolve Money makes money primarily from Express Fees ($1.50 for a same-day payment) and from offers.  Customers will soon see offers that have been put together to provide them a benefit – it could be an offer for better service or lower prices with a different provider.  Our goal is to only provide offers that are relevant to our customers and in some way can help them save money and/or make their life easier.”

Mortgage payment exceptions

Evolve recognizes that their current limits (e.g. $1000 per day) make it difficult or impossible for many people to pay their mortgages and other very large bills.  Towards that end, they are planning to make exceptions to the limits for certain types of bills.  There will still be restrictions, of course, but the specifics are not yet known.  I was told that we can expect this new capability in September or October 2014.

Make payments with credit cards

Evolve is planning to allow people to use credit cards to make payments in the future, but unlike debit payments they will charge a fee for this service.  They haven’t decided yet whether the fee will be a percentage of the payment or a monthly subscription fee.  They will allow use of Visa, MasterCard, and Discover cards, but no decision has been made yet about American Express.  I was told to expect this capability by October 2014.

Make payments to credit cards

You can’t currently use Evolve to pay off your credit card bills, but my source says that you will be able to in the future.  I was told that there probably won’t be a fee for this service, but there will be strict limits in place.  No decision has been made yet about whether they will allow payments to American Express.  I was told to expect this capability by October or November 2014.

My Take

I’m not a fan of the way Evolve has handled risk prevention (through sudden shut-downs) or the rollout of new rules (they could have easily sent out emails to their customers ahead of time).  That said, I feel better than ever about the long term prospects of Evolve.

To me, Evolve’s business model finally makes sense.  By offering customer’s special deals, Evolve’s customers will have a chance to save money and Evolve will earn sales commissions or the equivalent.  Yes, it costs Evolve money to offer free bill payment services, but that’s a reasonable expense to take on in order to build and retain a large customer base.  And now, with their 4 payment limits, I think they have a way to reasonably contain per-customer expenses.

I’m optimistic, too, about the promised future enhancements.  If all goes according to plan, large mortgage payments will once again become possible.  And, with the added ability to pay credit card bills, we should have no shortage of potential bills to pay through Evolve.  Whether or not I’ll be excited about the ability to pay with credit cards will depend upon the pricing scheme they settle on.  It’s already possible to make many types of payments with credit cards: ChargeSmart allows many types of payments, including mortgages for a fee ranging from about 2 to 3 percent.  WilliamPaid allows rent payments for 2.95%.  And, PayUSATax allows federal tax payments for only 1.87%.  If Evolve finds a way to beat these competitors price-wise, I’ll be excited about that too.

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