Making child support payments online is not new, but existing sites, contracted through state governments, only processed the base payments. None had ever helped parents split and track the child’s other necessary expenses, like dentist bills and extracurricular activity fees. And there has never been a good way to ensure each parent that the money was actually going to the child. A site called SupportPay, which raised $1.1 million in funding this past May, is changing that.
Like Mint.com, SupportPay is an accounting tool that exists completely online. Couples can use the detailed accounting records in a legal proceeding if they can’t settle a specific financial dispute themselves. Or they can use the records for filling in their taxes.
But it’s also a bill pay tool. You can pay the child support payments to the ex-partner with PayPal, cash, check, or credit card. Through desktop and mobile platforms it lets parents upload receipts and maintain proofs of payment as well as upload other types of documents, like report cards and pictures related to the child’s activities. Each parent can determine which documents he or she wants to share or keep private.
If the parents can’t decide on how to divvy up specific expenses, the disputed documents get filed away for future reference for when and if the parents decide to seek a mediator.
“The [dads] say, ‘I have no problem paying. I just want to know the money is going to my child,’” says Sheri Atwood, the founder of SupportPay and a Fast Company Innovation Agent. “The person typically paying these expenses, typically the mom, says, ‘He has no idea how expensive these kids really are.’”
The site’s detailed accounts keep both parents on the same page, making the situation as clear as possible in one, centralized location and minimizing conflicts that would require legal action.
The setup process for child support differs for each family. When divorced parents determine who pays what for their children, they can first come to an agreement on their own terms or, in the case of non-agreement, get a mediator, lawyer, or judge involved to reach an agreement.
The first part of the agreement covers base support, the single monthly amount that one person pays to the other parent. The monthly payment is a calculation that is based on each parent’s income and the amount of time the child spends with each parent. It’s supposed to cover things like rent, electricity, and groceries.
People most often associate base support with child support, but it only covers 60% of the child’s total expenses. The other 40% consists of medical, educational, and other special needs, like extracurricular activities, orthodontics, and college tuition. These costs fluctuate over time and are harder to keep track of than a recurring, monthly payment.
No official authority keeps track of either payment. It’s not as though parents receive a bill from the government to remind them to make these payments. It’s just something they need to remember to do.
So, Atwood’s site helps divorced parents manage both the base support and extraordinary expenses for the child, while avoiding frustrating legal quibbles. Payment reminders and confirmations, as well as detailed documentation storage on the site, keep both parties in the know.
Child support payments have been largely untapped by the tech world. The stereotypical startup founder is a single male in his 20s, but most people don’t confront divorce until later in life. And it’s typically the women in the relationship who run into financial stress when caring for the children. SupportPay came from an unlikely founder, a divorced woman in her 40s.
Atwood, a former VP at Symantec, was filling in an expense report at work when she got the idea for SupportPay. Her husband had forgotten to pay for his week of the daycare payments, but all he needed was a simple reminder. She couldn’t find a system anywhere online that would help manage the accounting and payments of her daughter’s child support, so she built her own.
“If I can’t learn to code and build this, it will never happen because I can’t afford to hire a team of developers to do it,” recalls Atwood.
Atwood taught herself how to code HTML/CSS and JQuery for the front end. For the database back end, she uses the Salesforce.com platform. She built the prototype herself, and up until a few weeks ago, she did all of the content development.
Other co-parenting platforms exist, but they don’t manage payment processes. They mainly help keep track of scheduling and communication, like the site Our Family Wizard does. And a Xerox company called Affiliated Computer Services, Inc., processes online payments for 14 states, but it only focuses on the base payments and goes through the government.
What SupportPay does is leaves the government out of the financial lives of the couple, leaving them free to sort out whatever payments need to be made among themselves. Atwood says only around 30% rely on the legal authorities to come to a child support agreement. The other 70% of separated parents don’t go through the government system to settle on child support. These types of couples want to make splitting the costs of raising the child as painless as possible, and they are typically SupportPay users.
Atwood and her ex-husband exemplify this type of cooperation, post-divorce. Atwood administered the proceedings of the divorce herself. It only cost her $350 in total. Before founding SupportPay, she and her ex-husband attacked her daughter’s expenses on their own. Child care, gymnastics, and yearbook activity fees would turn into a running bill of I.O.U.s–$50 here, $100 there.
“It quickly became this sort of administrative, financial nightmare, where I had two spreadsheets, and we were–I don’t want to say arguing–having intense conversations about expenses in front of our daughter,” says Atwood.
A SupportPay user, Lola Serrano, also used an Excel spreadsheet with her ex-husband before signing up for the site.
“I kept having to explain everything, and if he didn’t like something on there, he could just delete it off,” says Serrano.
For the last eight months since she started using SupportPay, Serrano hasn’t had to explain any of the expenses to her husband. The site’s centralized database lets her keep communication over finances with him to a minimum.
“You don’t have to argue about who did this or who paid this. Everything is done online,” says Charles Teater, another SupportPay user.
Teater says he doesn’t speak to his ex-wife in person or on the phone, so the online aspect is important to him. He was happy to have received a simple invitation from his ex-wife to use the site. For them, the strictly online communication has been conflict-free for the past six months.
Everything from communication and paying for things has become so easy on the web. Making a transaction is quick and is mainly a solitary activity, requiring little effort. Sending an email or an instant message doesn’t require waiting for the person on the other side to respond right away; it’s indirect. SupportPay capitalizes on all of this.
“The Internet has caused people to stop talking, right? Stop communicating in person. But the one, actual set of people who really don’t want to talk to each other, that is where the Internet hits its ideal,” says Atwood.