We live in an age of instant gratification. And we have technologies that offer everything from music downloads to on demand car service to thank for it.
The consumer expectations created by these technologies are now trickling down to the insurance industry and impacting the way companies disburse claims payments. People with insurance claims today not only expect faster payments, they want more choices on how to receive them.
The good news is, payment solutions are now available that enable insurance companies to satisfy their insureds’ desire for speed and choice, while also saving themselves time and money on payment processing. One option, push-to-debit card, could soon be the standard for the insurance industry. It allows companies to pay a claim instantly to a consumer’s debit card.
Here are five reasons to consider push-to-debit card as a new option for your insureds.
Insurance company processes and infrastructure have been designed to pay claims through the mail using paper checks. Historically, that made sense, given that claims typically involve one-time payments, and insurance companies collect home addresses, rather than mobile phone numbers or email addresses.
While more than half of business payments are still issued by paper checks, this approach is not sustainable. It costs an average of nearly $6 for a business to issue a check. For some, it can be much more. In addition to incurring labor, postage and other processing costs, paper checks also take longer to reach the recipient, which can be perceived as poor customer service. Paper checks also are subject to theft and fraud losses.
Push-to-debit-card payments can be completed without the hassle or expense of issuing a check or obtaining bank account information. The funds become accessible within minutes, compared to the days it can take to process a direct deposit or traditional check.
An insurance company simply sends an email to an insured or claimant when a claim is ready to be disbursed. The email includes a link to a payment portal where they go to collect the payment. Moments later, the funds are available on their debit card for use. The entire process can be completed in under 30 minutes and for a fraction of the cost of a paper check or direct deposit.
According to a 2017 Visa Digital Disbursements research survey conducted by Aite Group, 6 out of 10 consumers would choose to have their funds sent through a real-time payment option like push-to-debit card over direct deposit or paper checks.
The reason is simple: push-to-debit card payments enables them to receive and access funds quickly and conveniently, without waiting for a check or bank transfer to clear.
Because push payments are already familiar to many consumers (think of them as a debit transaction in reverse), adoption is happening more quickly than you might think. The process is especially familiar to consumers who already send money online to friends and family. Push-to-debit card payments also use cards and accounts they already know and trust.
Push-to-debit card solutions are ideal for non-recurring payments, such as claims. They require only that a person has a debit card and an email address and/or phone number to which you can text or email a payment notice. It’s not necessary to collect or store any account information, like you would for direct deposit, which helps reduce risks associated with fraud and cyber theft. It’s a win-win for all parties.
For more information on push-to-debit card solutions and why this convenient, low-cost approach is on its way to becoming the new corporate standard, watch this new Business to Consumer Payments Webinar from Commerce Bank.