Learn the ‘Pay by Paycheck’ road map from conception to implementation in a thought-provoking discussion with Jessica, Highline.
Jessica Kemp has over 20 years of experience building and scaling payments products and solutions around the world. In her current role as SVP, Head of Product and Marketing at Highline, she informs and guides the direction of a new, innovative payment network and its proprietary new payment method, Pay by Paycheck. A proven leader in payments, fintech and SaaS, Jessica has been recognized as a “40 Under 40” award recipient by the Electronic Transaction Association. Jessica’s extensive knowledge and experience comes from her previous roles as Chief Product Officer (CPO) at Banked, a London-based open banking, account-to-account payment company, as well as founder and CPO of her own company, KyckGlobal, Inc., a payout distribution platform. Jessica has served in many executive product roles at payments and merchant acquiring companies, including at Checkout.com, MerchantE (a Cielo company) and Heartland Payment Systems. Her career spans leading product and development initiatives from payment acceptance and processing solutions to alternative payment methods and payment-linked reward and loyalty solutions. She currently serves as an advisor to Equali, a fintech platform streamlining merchant reconciliation globally, and participates in several other industry organizations and initiatives. Jessica holds a Bachelor of Arts degree (Magna Cum Laude) from Temple University and an M.B.A from LaSalle University.
Jessica, could you please share your professional journey so far and highlight key milestones in your career?
Software product development wasn’t even a curriculum consideration when I attended university, so I focused my studies on marketing, which at the time included product strategy. It became evident early in my career that I was a product person. I was spending more time problem solving, such as digitizing loan pre-qualifications and applications, to help borrowers overcome the fear of rejection that prevented them from applying for a mortgage than I was marketing products and services. After the housing crisis, I stepped out on my own and founded my first company by doing a lot of freelance gigs. During this time I designed and built one of the first SMB merchant website builder tools that had embedded search engine optimization (SEO), back in the days when you could meta-tag your way to the top of Google rankings.
Naturally, I began to ask myself where do I go from here?
I started pursuing my MBA and joined a boutique consulting firm in the search of an industry that I could call home. This is how I landed in payments. I joined Heartland Payment Systems as a product marketer but found myself in the same problem solving situation. That’s when I realized software product development was a real job and product was desperately needed in payments, all of the firms were waterfall shops delivering April and October card association updates. Not building products and services to solve merchant challenges. Square changed that. While the entire industry was focused on trying to port their old school virtual terminals to mobile phones with cheap dongles, I realized there was a bigger disruption at play. The payments industry was ripe for tech disruption, but also for business model disruption. Square paved the way for payment facilitation and transformed the way the industry conducted business. That’s when I decided to stay in payments.
I spent many years working with merchant acquirers before founding my own company, KyckGlobal, that focused on payout facilitation and modernizing disbursements across a multitude of alternative payment methods. This experience is what caused me to ditch the corporate gigs for the risker, fast-paced startup and scaleup world. It also led me to enter the global market working with organizations such as Checkout.com and Banked to expand internationally, as well as advising for startups, like Equali. I enjoy helping other founders materialize their visions. Banked focused on account-to-account payments riding the rails of open banking in Europe, and that’s what led me to Highline. There’s so much friction in the account-to-account consumer experience with redirects to mobile banking applications; I knew there had to be a better way. In meeting Highline’s CEO, Geoff Brown, I realized he had a vision for a much simpler, yet more sophisticated approach to better facilitate payments for consumers where they needed help the most, managing bill payment.
When it comes to product strategy and development, what is your approach?
In product driven organizations, it’s the product strategy that brings the company vision to life and drives the achievement of company goals, be that an OKR model or KPI framework. I’m a big proponent of stage gates in the product development process as a means for constant analysis of the product strategy, allowing the organization to responsibly change and adapt the roadmap when needed to drive stronger outcomes. In the startup world, when you’re moving fast, ideation is basically your proof-of-concept. Get something out to start testing to learn quickly. As such, Pay by Paycheck started as a proof of concept that leveraged screen scraping to accelerate time to market. Naturally, we learned a lot from that. Such as, screen scraping is not a reliable approach for payment facilitation. We experienced a number of issues, but our greatest challenge was screen-scraping’s inherent data inaccuracy that led to an unreliable payment experience. Payment processing requires a level of perfection that we found to be unachievable with screen scraping. To achieve highly reliable performance, we realized we needed true partnerships with payroll providers to reach the source of the funds directly.
Could you take us through your process from ideation to execution of Pay by Paycheck?
There was a strong desire for consumers to use this payment method, but the customer experience proved to be a challenge and became a major barrier. Much like the open banking account-to-account payment experience there was too much friction with the consumer redirect to payroll platforms for login, which resulted in a great deal of abandonment. Consumers had a high willingness to try despite the experience but were met with severe login challenges; many consumers attempting ten or more times to make the payroll login work.
As a result, we learned that higher coverage didn’t matter considering the payment related challenges, poor consumer experience and low conversion rates. However, our proof of concept validated that we were on to something. Lenders and billers were looking for a more reliable, lower cost and less risky payment method than card payments or blind ACH pulls. Even consumers had a high willingness to try this new payment method as an alternative to ACH. And with more consumers increasing living paycheck to paycheck, we knew that they needed a better bill payment solution. So, this catapulted us into deeper discovery, where we decided to leverage the current API movement in payroll to directly integrate with payroll providers. This approach enables us to provide more robust product offerings to lenders and billers, a much more reliable approach to Pay by Paycheck payments and ultimately a better customer experience for all constituents in our payment network. Now we’re focused on growing and scaling our payment network, building up both sides from adding more payroll partners and billers to enrolling more consumers.
At Highline, how do you manage roadmaps and strike a balance between short-term deliverables and long-term strategic goals?
Roadmap planning is both an art and a science. If your roadmap isn’t data driven, it’s not a roadmap, it’s a wish list. Establishing capacity is a must and having the discipline to estimate consistently, to establish your margin of error, and recalibrate over time is essential to achieving predictable product delivery. Managing the roadmap becomes much easier once you know how much you can achieve in your given timeline.
Once you know how big the box is, it becomes much easier to prioritize what you’re going to fill it with. I’m a big believer in forced rank prioritization to ensure clear focus for the company and team. There’s only one number one priority, then a number two and so on. We rank these initiatives through a combination of value to the organization and level of effort. Value to the organization could be achieving goals, regulatory or compliance related items required for us to continue operating, platform scalability and extensibility as well as the dreaded tech debt you create along the way. We prioritize technical debt in the mix to ensure we’re addressing high value items that will help us scale before it’s too costly or causes operating issues. It’s always a balancing act, but it’s much easier to manage when you understand the business case and level of effort for each initiative. Then you have the data you need to make more solid build, buy or partner decisions, as well as add surge capacity with external resources to deliver prioritized initiatives. The better your plan the more prepared you are to adapt that plan when things change, and things always change. With this framework it becomes much easier to responsibly change the roadmap to adapt to market dynamics, regulatory changes, competitive pressure and a myriad of other external factors. And ultimately, it ensures you’re prioritizing and working on the most important initiatives from adding long-term strategic value to seizing the proverbial low-hanging fruit with high value, low effort initiatives and satisfying the business as usual items needed to continue operations.
Can you provide an explanation of the concept of Pay by Paycheck and outline its key features?
Highline is a payment network with its own alternative payment method, Pay by Paycheck, which enables consumers to make bill payments directly from their paychecks.
- Ability to spread bill payments across their paychecks to simply their finances.
- Avoid blind funds pulls from their bank accounts that can result in overdraft and other penalty fees.
- Set it and forget it, automated bill payment to avoid late and missed payments.
- Decrease payment process expenses and save money by bypassing traditional payment rails.
- Reduce churn by giving customers a reliable autopay option.
- Deliver a seamless customer experience with a truly embedded finance solution.
- Reduce risk exposure with a payment method that doesn’t require the exchange or storage of account credentials.
- Reduce losses with priority payments made before paycheck direct deposits into bank accounts.
- Increase conversion with higher approval rates and a better customer experience.
- Improve collections with prompt notification of employment changes to proactively offer impacted customers repayment options.
- Expand their customer base to increase revenue.
In what ways does Pay by Paycheck address the challenges consumers face in bill management and achieving financial flexibility?
The number of consumers living paycheck to paycheck coming out of the pandemic appears to be growing. A recent report from LendingClub and PYMNTS found that as of January 2023, 60% of adults in the United States, including more than four in 10 high-income consumers, live paycheck to paycheck. This means the majority of the population needs to carefully track all their bills to ensure they have enough money left in their checking account on due dates which are scattered across the month.
The Highline payment network addresses these challenges by aligning billing due dates with pay days. Pay by Paycheck is a bill payment option that avoids costly processing fees and negative consequences for billers and consumers alike. No need for consumers to worry about overdrafts or the associated costs. It also addresses a major merchant billing concern, to receive priority payments from consumers to avoid late and missed payments altogether. Reducing churn and credit losses in this economic climate is extremely beneficial to billers, lenders and consumers. Consumers end up covering the cost of credit losses through higher interest rates, so lenders can offset the losses. Given the greatest challenge our constituents face right now is an economic one, a customer first approach is necessary. And every penny we can help consumers, billers and lenders save in the transaction value chain is imperative. From reducing payment processing expenses to avoiding associated penalty fees, consumers and merchants both benefit by keeping more of their money during a time when they need it the most.
How do you measure the success and effectiveness of your product strategy at Highline? What metrics or key performance indicators (KPIs) do you rely on?
Client Enrollment: Number of lenders and billers from the prospect pipeline that became Highline clients offering Pay by Paycheck as a payment method.
Consumer Conversion Rates: Of the consumers eligible for and presented with Pay by Paycheck, how many enrolled to use the payment method.
Active Connections / Payers: Number of consumers actively enrolled in and making Pay by Paycheck payments.
Payment Success Improvement: How much less likely a Highline payment is to fail compared with ACH or other payment methods.
How do you stay updated with industry trends and emerging technologies that could impact product development at Highline?
I’m constantly scanning industry journals and other media outlets as well as continuously networking with my peers in the pursuit to learn more. I also subscribe to and participate in educational and informative sessions on key topics that could benefit Highline. My goal is to ensure I’m always educated on major trends impacting other industries that might be relevant to our industry. Seeking patterns and drawing parallels in other industries can be very helpful in crafting a competitive edge in your own industry.
What is the biggest piece of advice you would want to give to company leaders?
Believe in the art of the possible and teach your team to do the same. Provide clear direction to activate your team, coach and guide them along the way and most importantly, trust them to deliver. In my experience, this approach typically results in small teams achieving great things. And achieving much more than expected. Spend less time overanalyzing and aiming for perfection — there’s no such thing as perfect information – and spend more time executing to get things done. Execution is what separates ideas from achievements. A mentor of mine helped me learn a long time ago when you focus on the art of the possible, you’ll find yourself impressed with what you and your team were able to achieve every single time.
When it comes to the future growth and scalability of Pay by Paycheck, what is Highline’s vision? Are there plans for expansion into new markets or the addition of new features?
Pay by Paycheck is one of many products that will come from the Highline payroll-driven payment network. In order to facilitate sustainable growth, our vision is to remain dedicated to our core competency of payment facilitation. Like any other payment network, we’re a routing and instruction arm that relies and operates on critical data elements to facilitate our payments. As such, we’ll be expanding our data offering to help our billers and lenders streamline other account operations and customer experiences on their platforms. All hinging around our core competency and not deviating too far to ensure we remain focused and delivering quality products and services. Our primary goal is to focus on what we will excel at and investing in doing those few things extremely well.
We’ll also be expanding our payment capabilities over time to facilitate different payment use cases and transaction types. Our primary goal is to achieve a certain threshold of market saturation in the US market before expanding internationally. However, global expansion is a critical component of Highline’s vision. We’ll tackle this responsibly by focusing on expansion into key markets and achieving our expected level of market saturation before opening the next wave of global markets.
As a leader, what is your leadership style like, and how do you motivate and inspire your team to perform at their best?
I’m certainly more of a transformational leader. I believe strongly in hiring smart people and empowering them. Great leaders articulate vision, direction and the definition of success clearly. This is my primary focus to motivate and activate teams. I’ve also found providing your team psychological safety, truly enabling them to fail safely and seize those experiences as learning opportunities is the greatest way to motivate and inspire. When you remove the fear of failure, your team is far more likely to take big risks but to do so in a calculated manner. That’s where truly remarkable ideas and solutions come to life. Some of the greatest lessons I’ve learned to shape myself and my career have come from the learning opportunities I seized in times that felt like failure. Those leaders that allowed me to fail safe gave me the greatest gifts, the lessons learned that I have carried through my career. Once you stop focusing on labeling them as failures or mistakes, you see everything as a learning opportunity to improve and grow. Having individuals and teams focused on the continued pursuit of growth and learning, without the fear of failure, is how you get individuals and teams to perform at their best. And of course, holding them accountable along the way.