Keeping overhead costs low, providing a quality product or service in a timely manner, turning customers into promoters, and increasing overall profits--these are every business owner's dreams, right? There is a way to help with that dream. It is called digital payments. Why have digital payments become so popular? Simply put, it is an efficient way to facilitate getting people their money, product, or service faster. The faster money moves, the faster everything else can follow. In the insurance world, the claims cycle offers one of the very best use cases for digital payments.
Digital payments, specifically ACH payments, are a great way to give value to your customers and decrease costs. Recent studies have shown that ACH payments overall have increased drastically in the last 2 years alone. A lot had to do with the pandemic and accommodating the flow of money when you couldn't do things in person. According to TradingPlatforms.com, the total transaction value in the digital payments sector will increase by 15% year-over-year, reaching roughly $9.5 trillion this year. Not only did e-commerce expand during this period of time, but so did the use of contactless and cashless payments as consumers became more comfortable paying this way.
In the past, digital payments meant IT Departments had to handle complex implementations and intensive maintenance in order to facilitate the complete payment cycle. This made it much higher in cost and the ROI was not attractive. However, the current state of technology has erased the barriers and the reasons to be skeptical of digital payments have vanished.
1) A Savings in Time & Cost
With modern integrations, digital payments can slash the overhead costs by limiting time spent on invoice processing and the other labor-intensive steps involved with paper checks. This means less employees, less manual errors, and much lower costs. When it comes to claims, you end up with fast and secure payments to insureds and third parties, conservatively saving your company between $0.50 and $2.50 for every single payout (“2022 AFP Payments Cost Benchmarking Survey,” Association for Financial Professionals found at afponline.org).
2) Increased Security
Believe it or not, going digital actually creates a safer way for money to flow, with more checks & balances of the money being exchanged. Integrated digital payments solutions are more equipped to monitor potential weak points in supplier management, treasury systems, and payment files. This allows for businesses to remain in good standing & keep their reputation in tact. The payment flow also can include low-friction identity verification, further enhancing the relationship between the insurance company and the insured.
3) Enhanced Customer Service and Retention
Offering digital payments is a great way for businesses to provide better customer service by offering alternative payment options that are more convenient and faster. This can additionally lead to improved loyalty and satisfaction. For example, the J.D. Power 2021 U.S. Property Claims Satisfaction Study,SM found that digital claims tools have driven customer satisfaction to their highest levels in the study's 14-year history ("Surge in Digital Home Insurance Claims During COVID-19 Drives Faster Cycle Times and Improved Customer Satisfaction, J.D. Power Finds," Businesswire, found at businesswire.com).
4) Efficiency & Accuracy
A modern, automated digital B2C and B2B payment solution means your staff will be spending less time manually entering payments, processing checks, and performing other non-efficient payment related duties, improving overall efficiency. Your claims staff will also be available to perform other value-added tasks within your business ecosystem.
The preferred method of electronic payments is going to vary based on the business and the consumer. However, ACH payments still continue to be the most common forms of e-payments. It is a favorite because of the low cost and the fact that it can work for all types of customers. Furthermore, it is time-tested, trusted, and relatively fast.
Virtual cards are another way to process payments digitally and they represent some of the fastest ways to transfer money. In most cases they only require an email address to send payments to payees. The email itself then includes both virtual card numbers and remittance details. This makes it easy for suppliers to process and reconcile payments.
Want to learn more about these and other digital payment options and what integrations are available? Noodle Group specializes in customization for your business and making sure such integrations communicate with the systems you already have in place and/or incorporating ones that will. You can also click here to learn about our Digital Claims Disbursement tool.
Identity Verification to prevent Identity Theft is not a new concept. It has been around since the early days of banking and became more nuanced as the financial services industry embraced technology. Though the general concepts of identity verification have remained the same, the execution of those concepts has changed significantly. Not only is the goal to keep your data and your customer's data safe & secure, but it is also crucial that the process is quick, seamless, and a good experience for existing insureds and future customers.
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