Here is Why Vehicle Lienholders Should Accept ACH Payments During Lien Payoff Requests.
You’re in the business of financing vehicles. Your customer gets in an accident and the car is, unfortunately, totaled. What now? Your customer has insurance and is eager to get a replacement vehicle, but they can’t get a new car until their claim is approved, the payment comes through, their lien is released, and new financing can be secured.
Right now, the industry standard for the lien payoff process is cumbersome. It can take weeks to get payments to clear, and that’s with no disruptions! You and your customers have to wait weeks (or even months) after an accident to get the transaction settled, causing frustration and extra costs for everyone involved.
The culprit? Checks. Checks are slow. They’re susceptible to a myriad of problems, including fraud.
As technology barrels forward, it’s curious that so many insurance payments are still done by check. Luckily, electronic payments are finally making their way into the insurance industry, and it’s long overdue. Lenders should jump at the opportunity to ditch checks and accept payments electronically. This seemingly simple change will have a ripple effect for the you (the lender), the insurer, and most importantly, your customer.
How is Commerce Bank revolutionizing the lien payoff process with digital payments?
It’s simple. Once the adjuster has settled the claim with the customer, the adjuster sets up a quick electronic payment instead of cutting a physical check. The electronic payment is verified by Commerce Bank, held for 48 hours for compliance purposes, and is then sent directly to your (the lender & lienholder) bank account.
The payment arrives via ACH, meaning that the funds are already cleared. No endorsement issues, no fraud, and it’s fast. Along with the funds already verified by Commerce Bank, you receive all the pertinent details. The Vehicle Identification Number (VIN), the payoff amount and date are automatically logged in your online banking. All your staff needs to do is match the payment details to your title management software and send out the title.
The benefits of ACH lien payoffs.
Introducing ACH to your lien payoff process has a ton of value. First of all, you’ll have less paperwork. That means less time searching through files and less room for human error. This can have real, measurable operational savings on every ACH payment that replaces a check.
When you use ACH payments, all payment questions are routed to Commerce Bank. Not you. Not the insurer. Not the customer. Commerce Bank handles all the troubleshooting, verifies funds before sending, and matches the payment details to the payments. With one point-of-contact on all of these ACH payments, you’ll see significant time savings when accepting ACH.
All of this saved time and money can help you quickly get titles out the door. You get your money faster and the customer can get their replacement vehicle faster. This ultimately leads to the top goal for all lenders and insurers: better customer satisfaction ratings.
A total loss is one of the most frustrating experiences a customer will have with your company. By expediting the lien payoff process, you’re likely to see higher customer satisfaction, earn repeat customers and receive more customer referrals. All this from a simple decision to accept electronic payments!
Is there a catch?
When it comes to accepting ACH payments from Commerce Bank, you don’t have any extra steps. There is no IT requirement and no training needed. You don’t even need a new bank account. The only catch is finding new, strategic ways to occupy your staff’s time, since paperwork and payment troubleshooting are a thing of the past.
Digital payments drive the industry forward and all you must do is provide your bank routing information to Commerce Bank to get verified funds straight to your account in a matter of days.
On the other side of the transaction, the insurance company improves its payment process and significantly decreases its operational costs and you can finance your customer’s next vehicle in record time.
It’s a win for everyone involved.
There are a few solutions on the market, but only one is fully managed beginning-to-end by a reputable bank: CommercePayments® PreferPay® from Commerce Bank. With this particular solution, Commerce Bank manages the customer service and account management and processes the transaction. Learn more about CommercePayments® PreferPay®.
For lenders, this is a real benefit. First, you don’t want to give your private banking details to just any company that asks for it. An established bank like Commerce Bank must follow strict regulations and laws to keep your information safe. You can be confident that your information will never be misused or sold. Plus, Commerce Bank worked with national insurance companies to build PreferPay® from the ground up, ensuring it works for everyone involved. Commerce simply works to close the loop the between insurer and lender so that the process can be expedited and have maximum benefit for lenders, insurers and customers alike.
How do I sign up for electronic payments?
If you’re ready to include ACH payments in your lien payoff process, simply provide your bank routing information to the bank that is processing the transaction. You can also encourage your insurance partners to implement PreferPay® at their institution!
For more information, visit commercebank.com/insuranceindustry.