Traditional payments vs. epayments: What are the benefits?
An epayment system, reduces the need for using paper-based checks and speeds up the payment process.
Customers expect more from their interactions with businesses. They want a high-quality, engaging experience time and time again, using the method that’s easiest and most convenient for them, which typically means mobile. Engagements with insurance companies are no exception. Yet, many insurers are still using traditional labor-intensive payment systems that and can take weeks before payment is received by policyholders. Now is the time to make the move to epayment solutions.
Let’s take a look at how traditional payment systems stack up against epayment solutions. Consider what happens in an auto accident. In a typical accident, there are multiple steps that take place before the policyholder can get back to driving his or her vehicle. In a traditional claims payment system, there could be multiple payments to multiple parties, each one requiring a paper-based check that must be endorsed over to the party providing the service to complete payment. This system makes a long, time-consuming process even longer, as it can take days or weeks for checks to arrive.
With an epayment solution, claim payments can be made quickly and directly to whomever policyholders designate, like the repair shop or towing company. And since there’s no physical check, using such payment methods as an automatic clearing house (ACH), direct-to-debit, and virtual cards, waiting times are significantly reduced.
Traditional claim payments and their use of paper-based checks offer a tempting opportunity for potential fraud. In fact, a 2018 survey of finance and treasury professionals found that 74 percent of U.S. organizations were the target of check fraud. But with an epayment solution, like ACH or virtual cards, the payment is backed by the bank, so there’s less exposure to the insurer and fewer risks involved.
Significant cost savings
Using paper-based checks to make claims payments can be an expensive undertaking for insurers. There are postage costs to consider, as well as the costs of printing checks, which can add up quickly if the insurer has a large customer base with lots of claims. Not to mention bank fees that pop up from time to time, like stop payments or reissuing checks.
Insurers that use an epayment solution have more payment options over paper-based checks. Paying claims by ACH or virtual cards saves insurers in both printing and postage costs. And depending on the relationship the insurer has with its financial institution, epayments can help reduce or even eliminate typical banking fees.
Making the switch to epayments
VPay’s total payment solution helps reduce the need for paper-based checks by enabling fast, secure payments. Our total payment solution simplifies the reconciliation process and eliminates many of the costs associated with using paper checks. To learn more about these and other benefits of using an epayment solution, download the white paper: Top Strategies for Auto Insurance CFOs: Modernizing Claim Payments.
Visit www.vpayusa.com or call 855-VPAY-USA to get started.