By Thomas A. Parmalee
Phillip Mason still remembers the day that changed everything.
“I was helping a family navigate a funeral bill,” he said. “They applied for the financing option we offered at the time – and were declined. I watched them put the cost on five different credit cards and scale back the service to afford it.”
That never sat right with Mason, who at the time was a sales manager at Dignity Memorial, a brand name of Service Corporation International.
“These were good people trying to honor someone they loved, and the system made that harder than it needed to be. I started thinking: What if there was a simpler, more dignified way?” he said.
He started getting to work on a solution to the problem and launched Lilypay with his co-founder, Andrew Virts, in late 2023, who serves as the company’s chief technology officer.
The two met through Y Combinator’s co-founder matching service, which Mason thinks of as online dating “but for entrepreneurs looking to build something meaningful together.”
As soon as he met Virts, he knew he’d found the right partner.
“When Andrew and I connected, it was clear he shared my vision for what we could build,” Mason said. “He brought exactly the skills and perspective I needed, and honestly, it felt like the right fit from day one.”
We recently caught up with Mason to learn more about how Lilypay works and how it can help funeral homes and the families they serve.
You earned your degree in English language and Literature … what led you to a career in sales?
You know, it’s funny how life takes you down unexpected paths. Right out of college, I needed to pay the bills, so I took a sales job thinking it would be temporary. But I quickly discovered I genuinely loved the human connection aspect of sales – listening to people, understanding their needs and helping them find solutions. My English background turned out to be incredibly valuable because so much of sales is about communication and storytelling. Those skills have been foundational throughout my career and especially in building Lilypay.
Tell us about some of the frustrations you had with the payment plans that are available to families, which led you to start Lilypay.
The existing options were just too slow and inflexible for what families actually needed. When someone is grieving, they need solutions that work quickly and simply. The traditional financing landscape in our industry hadn’t really evolved to meet modern consumer expectations. I saw an opportunity to bring the kind of payment flexibility that people were already familiar with from other industries into funeral service.
How did you fund the launch of the company – and is this the first company you’ve started?
This is my first company, and I’m lucky to have an incredible co-founder in Andrew Virts. We’re both first-time founders, but we came into this with a shared mission to really help families during one of life’s most challenging moments. We bootstrapped the launch in the early days – using our own resources to get things off the ground – and have grown methodically from there, always keeping our focus on solving real problems for real people. It’s been rewarding to build something sustainable that truly makes a difference.
How did you come up with the name of the company?
We wanted something that honored both the fintech space and the funeral profession. Lilies are such a universal symbol of remembrance and respect, and “Lilypay” felt like it captured both the compassionate nature of what we do and the modern payment solution we’re providing. It’s memorable and meaningful.
Tell us exactly how Lilypay works.
We partner with funeral homes to offer families a simple buy now, pay later option – or as we like to call it, “goodbye now, pay later.”
Families apply online, complete a soft credit check, and if approved, make their first installment up front. We then pay the funeral home directly via ACH. Repayment happens in four equal installments, spread out over either three or six months – monthly or every other month. It’s quick, interest-free, and designed to ease the financial burden during one of life’s hardest moments.
What makes you different from alternative solutions?
There are a few players offering financing, but most either rely on credit-heavy underwriting or tack on interest rates. What makes Lilypay different is our flexibility – we look at banking data, not just credit scores, and offer a crowdfunding component if someone falls just short. Plus, our funding timeline is fast – we can turn around decisions and payments the same day.
What percentage of families need a solution such as Lilypay?
The data is pretty compelling. Pew Research shows that nearly 60% of Americans couldn’t cover an unexpected $1,000 expense without borrowing or going into debt. When you’re talking about funeral expenses, which often run several thousand dollars, that financial reality becomes really challenging for families who are already dealing with grief. At the same time, buy now, pay later has exploded across every other industry because it meets a genuine consumer need. Families are not only familiar with this payment model – they expect to see it offered. We’re just bringing that modern payment flexibility to an industry that’s been underserved in this area.
Do you only work through funeral homes — or do you offer your services directly to families as well?
Our primary focus is partnering with funeral homes because that’s where families naturally turn for guidance during their time of need. Funeral directors are trusted advisers, and we want to support them in serving their families better. While families can reach out to us directly, we find the most meaningful impact happens through those existing relationships.
You tout your loans as being fast and affordable … tell me more.
We keep it simple and transparent – no interest, no compounding, no hidden fees. Just a flat service fee based on the repayment term families choose. For our three-month option, it’s 4%, and for our six-month plan, it’s 8%. That’s it. No surprises, no complexity. Families know exactly what they are agreeing to up front, which is so important during a difficult time.
So, for a $7,000 funeral:
Three-month option (4% service fee):
- Amount Requested = $7,000.
- Service Fee = ($7,000 * 4%) = $280.
- Total Amount Financed = $7,280.
- Installment payment = ($7,280 / 4) = $1,820.
Six-month option (8% service fee):
- Amount Requested = $7,000.
- Service Fee = ($7,000 * 8%) = $560.
- Total Amount Financed = $7,560.
- Installment payment = ($7,560 / 4) = $1,890.
So, a family can either pay $1,820 every month for three months, or $1,890 every other month for six months. That’s it – no interest accumulating, no surprises, just clear and predictable payments that help families budget during a difficult time.
How many funeral homes are you working with?
We’re now working with over 20 funeral homes across the country, and we’ve been really pleased with how quickly families and funeral directors have embraced the solution. We’re focused on sustainable growth that allows us to maintain the high level of service that both funeral homes and families deserve. The response has been incredibly positive.
How long does a family have to repay a loan – and what are the penalties if they are late making a payment?
Families can choose between three-month or six-month repayment plans, with payments spread out monthly or bimonthly depending on their preference. If someone runs into trouble, we start with compassion – there’s a grace period, and if a late fee does apply, it’s just a flat $15, not a percentage that spirals. But honestly, we’d much rather work with families to find a solution before it gets to that point. Our goal is to help, not to add stress.
What are you anticipating in terms of default, and how do you safeguard yourself against that (in terms of vetting, insurance, etc.).
Like any lender, we expect some level of default – that’s part of the business. But our default rate has remained low and continues to improve as we refine our underwriting. We’re selective in who we approve, and our model is built to be sustainable.
What is your approval rate when someone seeks a loan?
We’re seeing a 68% approval rate currently, which I think strikes the right balance. We’re not trying to be overly restrictive – we want to help as many families as possible while maintaining a sustainable business model that protects both families and our funeral home partners.
What are the most common questions you get from funeral home owners about Lilypay (and what are the answers)?
The most common question we hear is, “How fast do we get paid?”
The answer is: Typically, the same day. Once a family is approved and makes their first installment, we fund the funeral home directly via ACH.
Another big one is, “What happens if the family doesn’t pay?” We take on that risk. The funeral home is never left holding the bag.
And finally, funeral directors often ask, “Is this going to add more work for my staff?” We’ve designed Lilypay to be as low-lift as possible. Families apply online, and partners can track the status through a real-time dashboard. Most funeral directors find they can explain Lilypay in under a minute during the arrangement process.
Why should funeral homes become a Lilypay preferred partner? What does that process look like?
Our Preferred Partner program gives funeral homes enhanced capabilities like faster approvals – we promise decisions within an hour. Plus, they get ACH payments that bypass credit card processing fees, access to our live application dashboard, and priority support. We do charge a monthly subscription for this level of service (which is $49), but most partners find the money they save on credit card fees alone more than covers the cost. The process is straightforward: Funeral homes can visit our website and join the waitlist. We onboard in batches every month to ensure quality support. There are still spots available in our next batch for anyone ready to get started.
Do you have any final thoughts?
I think the most important thing to understand is that we’re not trying to change funeral service – we’re trying to support it. Funeral directors do incredibly important work, and our goal is to give them one more tool to help families during their most difficult moments. At the end of the day, it’s about helping people honor their loved ones with dignity and without unnecessary financial stress.
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