These days, many people prefer emails to regular mail and e-books to paperbacks. Many people also prefer digital payments to paper checks. If people prefer to send money using fast and convenient digital tools, you can bet they also want to receive money that way.
Many insurance companies already accept digital payments for premiums and it has been a beneficial payment staple for several years. But have you explored the benefits of making outbound payments and the process for establishing the functionality? Insurers have largely embraced inbound digital payments, but many balk at outbound digital payments. It’s time for that to change because the truth is, it’s a win-win situation.
Checks Are No Longer the Preference
The 2019 Federal Reserve Payments Study found that ACH debit transfers exceeded the number of check payments for the first time in 2018. There were 16.6 billion ACH debit transfers and 14.5 billion check payments that year.
The 2020 findings from the Diary of Consumer Payment Choice from the Federal Reserve Bank of San Francisco shows that check usage is low and declining.
- 5% of payments were made using checks (down from 7% in 2016).
- 11% of payments were made electronically.
- 30% were made using debit cards.
- 24% were made using credit cards.
Some people, especially younger people, never write checks. They have other options, from debit cards to Venmo, Apple Pay to Zelle. They’re used to easy mobile payments and instant transactions – and they expect these options from the companies they do business with.
Using Checks for Outbound Payments Sends the Wrong Message
If you accept digital payments for premiums, it’s likely because you understand the advantages inherent in doing so.
- You get funds fasters, improving cash flow.
- You don’t have to deal with the hassle of going to the bank to make deposit.
- You don’t have to worry about paper checks getting lost in the mail.
Don’t you think your customers want these benefits, too? Of course, they do! And adding outbound payments is easier and more efficient than you think.
Improve the Claims Process with Digital Payments
No policyholder enjoys the claims process. It’s an inconvenient hassle and they want to put it behind them as quickly as possible. But waiting for a claims payment drags out the process.
From the perspective of your customers, it can add stress and frustration. We need our vehicles — and when a vehicle has been in an accident, we still need it to get to work, a child’s school, the grocery store – basically, everywhere. And while a claim has been approved, until it’s paid, life is on hold. Insureds are left wondering, “what is taking so long?”
Unhappy claimants will take their business elsewhere. Offering fast, digital claims payouts is a logical way to improve claimant satisfaction and improve customer loyalty.
Offering Digital Payments Isn’t as Hard as You Think
If you’ve been avoiding digital outbound payments, it might be because you’re worried about the unknown steps and possible challenges. The good news is that offering outbound digital payments is not difficult or a hassle.
In fact, it can result in a more efficient payment process.
Nevertheless, there are some issues to consider before diving in:
- Payments and related data must be kept secure.
- Payments must be tracked with proper reports and reconciliations.
- Payment options much be selected carefully.
With the right payment partner, these issues do not need to hold you back. We walk you through our straightforward process, offer the industry’s most competitive pricing and handle the heavy lifting for you. Request a demo to see how payCloud.io’s digital outbound payment platform can work for you.