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People around the world are projected to make 726 billion transactions via digital payments by 2020, according to a 2017 study by Capgemini and BNP Paribas. Customers today are beginning to expect a digital option for all transactions, and payments for claims are no exception, with many customers asking why they are still waiting on paper checks from their insurance provider. At Snapsheet, we witness this every day; among customers, our carriers that use Snapsheet Transactions, our digital payments solution, 70 percent of them opt for ACH payments over check.
It’s not just consumers who benefit from digital payment solutions. Organizations that are adopting digital payments are experiencing improved operational efficiencies, such as increased speed and transparency via more timely status updates and processes. This being said, it doesn’t hurt that quicker B2B payments can have a positive impact on customer experience; quicker payments for repairs often mean quicker repairs.
However, as with any big change, there’s always a “but.” Traditional checks have offered carriers a consistent reconciliation process and the option of being stopped or paused, which for many carriers is an appealing safeguard. Reluctance around adopting digital payments is partly due to the perception that this safeguard will no longer be available. Most carriers are not willing to take this risk.
Fortunately, deciding between a “safeguard” and the vast benefits that digital payments provide doesn’t need to be one or the other. The lack of an emergency brake option for digital payments is just one of the most common misconceptions held by carriers.
Aside from just a safeguard solution for delaying payments, carriers associate a number of other risks with digital payments. Below are three myths about the risks of digital payments and how Snapsheet debunks each.
Myth 1: Instant payments cannot be recalled.
A common misconception associated with digital payments is that once the submit button is pressed, the payment is gone with no way to reverse the transaction.
Instant payments can pose some trepidation for carriers, but Snapsheet can reduce this with custom-built checkpoints. For example, Snapsheet is able to build in pauses so payments aren’t instantaneous. We work alongside your risk management team and develop programmed stops, which can be anywhere from 30 minutes to 24 hours that mimic traditional payment methods. Checkpoint specifics, such as timing and amount, can be determined by the individual carrier.
Myth 2: Digital payments will complicate our current reconciliation and cash management processes.
Carriers often wonder what the reconciliation process looks like with a digital payment platform. How will it change the existing process, and will there be any complications, as reconciliation requires a different approval process based on the type of payment?
Carriers have the option to be updated on the payment status, plus all of the information needed to ensure they are able to process the payment efficiently. This transparency also extends to payees, including claimants, policyholders and business vendors.
Myth 3: Digital payments are more likely to inflict network issues.
Network issues are a top concern for carriers. Many carriers fear their current systems won’t be compatible with digital payment technology and could cause outages or require major updates.
Snapsheet Transactions is configurable to all carriers’ systems. Our team will work with your existing systems and technology to make integration seamless.
Below are additional benefits associated with adopting a digital payment solution:
- Customized Workflows – Transitioning your existing payment system isn’t a simple swap. It will take a thoughtful and strategic approach. Snapsheet Transactions configures to all IT systems, claims workflows and treasury workflows.
- Delighted Customers – Your claims process could be speedy, but if the payment takes days or weeks to be received, the whole process will feel slow from the customer’s perspective. This will leave an unfavorable impression in the eyes of your customer. An example of a use case might be a catastrophic event, such as a natural disaster. A Field Adjuster could be in someone’s driveway and push instant payment to provide immediate funds. A secure digital process can capture the customer’s debit card, and payment can be delivered before the adjuster leaves.
- Reduced Security Risk – Security is Snapsheet’s top priority. Account information is tokenized and securely transferred to our banking partner.
- Saving time and resources – Saving a day of payment processing can save a day of rental car fees and other costs associated with ensuring that the absence of a vehicle doesn’t interfere in the customer’s ability to live their life.
- Claims Negotiations – The ability for payees to sign a release waiver and push payment instantly via push-to-debit.
Making a big change isn’t easy, especially when the current system has been working. However, in the age of digitization, it’s crucial to meet customer expectations, and for most customers, payment is the most important factor shaping their overall experience. In order to effectively choose a digital payments partner, it’s important to understand the benefits and the facts about how they will impact your business.
Interested in learning more about digital payments? Visit here.