B2B and B2C Payment Options for P&C - IASA 4.2 Payment Options … · VCard •ACH •Check •E...

B2B and B2C Payment Options for P&C

Jarvis Shockey, VP Payer SalesNovember 25, 2019

©2018 VPay®. Proprietary and Confidential. This document may not be shared without express written permission.

Claim payments are the last mile

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Insurers need to make it a good one!

It is the last experience the policyholder and service provider will remember


Innovating the last mile in claim payments

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Payments should:• Be paperless• Be frictionless• Provide choice• Seamless to

adjuster


Launched2002

HeadquartersPlano, TX

FTEs182

2019E Dollars Processed $20B+

2019E Transactions48M+ (~4M /month)

Payees in Database900K+

In-House Call Center150K+ YTD inbound calls

e-Payment Growth190% last 3 years

VPay is leading a major industry shift by empowering its insurance customers with proprietary, best-in-class, pioneering software, claims payment technologies and rich remittance data to enhance the payment experience and eliminate processing and management costs

VPay at a glance

Clients100+ (with over 9,000 of their customers)

Patent Awarded in 2010 and reissued in 2013


• Medical facilities

• Auto Repair facilities

• Other Service Providers

• Contractors

• Legal Fees

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• Settlements

• AP Vendors

• Policyholders

• Claimants

• Brokers

• Agents

Typical payees


• Service Provider

• Medical Provider

• Body Shop

• Towing

• Contractors

• Legal

• Bill Review

• A/P

• Agents/Brokers

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• Claimant/Policyholder

• Policyholder and Vendor (Body Shop, contractor, etc.)

• Multiple Policyholder

• Single Policyholder

• Refunds

• Real-Time /

On Demand emergency payments

Use cases


B2B vs B2C

Balancing Policyholder/Claimant experience vs cost

B2B objectives are driven by cost considerations

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• Different data requirements

• Different frequencies

• Different relationships

• Different capabilities of receiving and processing

• Different regulations


Service Provider

• VCard

• Real-time VCard

• ACH

• Check

• E-check

• Wire

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Claimant/Policyholder

• Push to Debit

• ACH

• P2P solutions

• Check

• E-Check

• Prepaid Plastic

Commission and Refund

• ACH

• Check

• E-check

It’s not just the money….it’s the data

Payment 0ptions

B2B Payment Options

.

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Check

KeyCheck

VCard

ACH

Provider A

VCard

ACH

Payer 1

Payer 2

Payer 3

Payer 4

Payer 5

Payer 6

The Power of Uniqueness

Unique capability for service providers to receive payments from multiple payers using different methods

Seamless claims payment experience eliminates processing and management costs

Drives industry leading electronic adoption

Best-in-class technology allows the payer to use their preference to pay

Award-winning, in-house call center available to all clients

Service Providers want options


• Check replacement

• Delivered via fax, portal, or mail

• No enrollment, no implementation

• Same process as consumer payment

• Service Providers accept because:

• Already enrolled

• Same day delivery

• Easy to reconcile

• Good Funds

• Security/Fraud protection

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Card like simplicity

Secure

Service Provider – Virtual Card

©2018 VPay®. Proprietary and Confidential. This document may not be shared without express written permission. 12

Sample VCard

• Single-purpose card• Exact amount loaded• Process like a patient payment• Delivered via fax or mail

Medical


Sample EOP Medical

Pat. No. US 8,332,238: Integrated payment and explanation of benefits presentation method for healthcare providers

EOP

• Replicate paper format

• Combined and transmitted electronically


Sample VCard

• Delivered via fax, email or mail

Automotive


Virtual card pro/con

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Challenges

• Not all payees can process (no terminal)

• Not all payees accept virtual cards

• Interchange

• Expired virtual cards

Benefits

• No enrollment required

• Remit delivered with payment

• Multiple delivery options to meet need of Payee

• Gateway to ACH

• Only option with zero cost delivery options

• Only option that can offer revenue share


• Medical Claims: 35-55% checks converted to e-payment

• Other Service Providers: 45-60% checks converted to e-payment

• Auto Repair Facilities: 75-90% checks converted to e-payment

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Results


• Requires enrollment and verification

• Payees have options for data delivery

• Fax

• EDI (ANSI X12 835 – medical, 820 others)

• Portal

• Secure email

• Email (for non-medical)

• Mail

With all options, data is separate from money and often delivered on different days

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Service Provider - ACH


Same day/ Real time ACH

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• Same-Day ACH

• Early cut off times, extend in 2021

• Processors will have later cut off times

• Limit increase to $100K in March 2020

• Clearinghouse RTP

• Limited Bank connectivity

• Only real time clearing network in US

• No recourse

• FedNow

• Fed response to RTP

• Maybe 2025


ACH pro/con

Challenges

• Payee must enroll

• Payee must provide banking information

• Payer may need to store this data

• Remittance data must be delivered separately, which complicates reconciliation

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Benefits

• Inexpensive

• Faster than mail


• Delivered via email link

• Requires pre-enrollment

• Directed to portal

• Payee must download and print

• Processed as Check 21

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e-Check


e-Check pro/con

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Challenges• Requires email enrollment

• Delivery of remittance challenges

• Privacy security concerns

• Payee must print check

Benefits

• Inexpensive

• Same day delivery

• Eliminates postage and delivery delays


Wire pro/con

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Challenges

• Manual

• Expensive

• Same requirements as ACH

• Same remittance data issue as ACH

• No recourse

Benefits

• Same day payment


B2B conclusions

• Matching data to payment critical to Service Provider acceptance

• There is a cost to Service Providers for processing any payment

• No one payment solution meets all Service Provider needs

• To maximize check replacement, Payers should offer multiple payment types

• Regulations on payment type

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B2C Payment Options


B2C payment innovations

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• Emerging alternatives to traditional payment methods

• Typically being used for enhanced policyholder experience

• Near real time payments

• Replicate consumer experience

• Leverage mobile

• Unbanked


• Real-time payment

• Covers 98%+ of all DDA accounts in US

• Money is available within minutes

• Works on Visa or Mastercard debit cards

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Any Debit Card Funds available to policyholder within minutes

Secure

• Unbanked can use pre-paid card (e.g., Walmart)

• Validate account and run OFAC

• Daily and monthly limits per card

• Currently $50,000

Claimant - Push-to-Debit


• Claimant/Policyholder enrolls via mobile, tablet, computer or paper form

• Validate routing and account number

• OFAC

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Claimant - ACH


• Credentials you have for the claimant (i.e. portal or your mobile app)

• Text based authentication

• Shared secret such as registration key given by adjuster

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Mobile: Authentication 0ptions


• Requires outreach via email or text

• Validation a must

• Payment options

• Check

• ACH

• Push to debit

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Mobile use case 1: direct to claimant




• One payee, others are endorser

• Payment options

• Check

• ACH

• Push to debit

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Mobile use case 2: multiparty (2+)




• One payee, one endorser

• Payment options

• Check

• ACH

• Push to debit

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Mobile use case 3: lienholder + policyholder




• Claimant is endorser

• Body Shop is payee

• B2B Payment options

• Check

• ACH

• Virtual card

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Mobile use case 4: claimant + body shop


ACH, wire and e-checks

• Nearly all benefits and challenges are the same as B2B

• Exceptions

• Data requirements are typically minimal

• Regulatory requirements are greater, especially for Workers’ Comp

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Reloadable debit card

• A reloadable MasterCard or VISA plastic debit card is issued

• Can be an “instant issue” for catastrophic events

• For recurring payments, funds can be electronically loaded

• Can be used to purchase goods

• Funds also available at ATM or any member Bank

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Reloadable debit card pro/con

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Challenges

• Initial cost of plastic

• Takes approximately 5-7 payments to become less expensive than checks

• Regulatory requirements

• If wage replacement or ALE, can’t use for all living expenses

• ATM fees can reduce benefits

• Inventory costs and management for instant issue cards

Benefits

• Provides instant funds for catastrophic needs

• Good option for the unbanked

• For recurring payments, can be less expensive than checks


Other P2P platforms

• Zelle

• 54% of DDA, mostly urban

• Directory based (email/text)

• Security concerns

• Venmo/Paypal/Google Pay/Apple Pay

• Limited coverage

• Directory based (email/text)

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• For emergency payments

• Check on demand

• Push to debit

• PrePaid plastic (Cat)

• VCard (for B2B)

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Emergency payment 0ptions

Conclusions


B2B & B2C payment conclusions

• No one payment solution meets all Payee needs

• To maximize check replacement, Payers should offer multiple payment types

• Policyholder experience may be more important than cost consideration

• Enterprise implications

• Support and management implications

• Fraud risk

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Other considerations

• Adjuster involvement

• PCI considerations

• Bank/Routing information storage and management

• Build/Buy/Partner

• Experience in outbound payments

• Batch vs API or both?

• Security concerns (cloud?)

• Compliance

• Multiple vendors?

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Thank you!

Q&A

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B2B and B2C Payment Options for P&C

Jarvis Shockey, VP Payer [email protected]

Leslie Locke, National Sales [email protected]

mailto:[email protected]

mailto:[email protected]

Date post:	21-Aug-2020
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