When BillGuard presented their innovative service at TechCrunch Disrupt earlier this year, the startup received fairly positive feedback from the panel of judges, which included well-known investor Fred Wilson. For background, BillGuard alerts users of unwanted charges such as hidden fees, billing errors, scams and fraud on credit card bills. The startup essentially crowdsources scams by alerting you when a charge on your bill is flagged by anyone else using BillGuard or posting scams on online forums. The startup will also take into account its own analysis and monitors the web for any complaints about credit card scams.
At the time of TechCrunch Disrupt in May, BillGuard had a freemium model, which charged users for extra services and additional credit cards to monitor (one card was free with the service). During the finalist panel, Wilson suggested that to reduce the friction of use, BillGuard could charge users based on how much the service saved users in terms of fees, as opposed to charging users for additional features and cards.
BillGuard’s CEO Yaron says that they took Wilson’s feedback seriously and considered this model, but eventually decided that operationally charging based on fees served didn’t make sense for the startup’s model.
As he wrote in this Quora discussion, “When you build a system that inherently gets better at scale, you need to remove all friction to scale. To be clear, BillGuard’s multi-billion dollar opportunity is in the backend with banks and merchants (and always has been), and if that revenue takes off faster than expected (its looking good) we may never deploy our freemium model and simply give all consumer service levels away for free. I would love to do that but we reserve the right with a 1 week old beta to take our time making the right decision for our users and our company.”
Now BillGuard is completely free (the company took Wilson’s advice to reduce friction) for an unlimited amount of credit cards and Yaron tells us that the company is seeing considerable traction in partnering for distribution deals with banks and financial institutions as a long-term business model. And he adds that this model will be deployed sooner than the startup expected.
BillGuard has actually saved its beta testers over $200,000 in refundable bad charges found in only the first month and the service found unwanted and unauthorized charges on 20% of its beta tester’s cards.
Here’s BillGuard’s initial demo at TechCrunch Disrupt.