3 Reasons Every Independent Insurance Agency Should Accept Payments Online
The article argues that independent insurance agencies should accept online payments because it enables faster policy binding by capturing payments immediately, eliminates the inefficiencies and costs associated with processing paper checks by encouraging lower-fee eCheck transactions, and allows agencies to legally pass credit card transaction fees onto insured clients, overcoming a common hesitation to online payment adoption.
Online payments have been on a meteoric rise for a long time. Nearly every major industry accepts credit card payments online, except for insurance. Many producers hesitate to accept online payments because they don't want to lose part of their commission to transaction fees from card brands like Visa, MasterCard, or Amex.
However, it's possible to pass on the credit card fee to your insureds. While some states regulate these fees (commonly referred to as a surcharge), there are still legal ways to make it work.
Now that we've addressed a common reason not to accept online payments, let's cover why you should.
Reason #1: You Bind Policies Faster
Have you ever had a client say the check is in the mail, only to wait a week and not receive it? That's slow payment—or possibly no payment at all. Imagine if, while meeting with your client, you could accept a payment on the spot via check or credit card using just your phone. No special software or hardware required—just enter a few numbers and click a button.
This allows you to capture payment immediately and bind the policy without delay. After doing the hard work of preparing the quote, don't let payment collection slow you down.
Reason #2: No More Paper Checks
When discussing online payments, credit cards often come to mind, but that's just the beginning. For insurance agencies, it's crucial to accept checks online. In fact, many agencies process three times more eChecks than credit cards, largely because eCheck processing fees are much lower.
When your insured has cash in the bank and is responsible for the transaction fee, they are likely to choose the lower-cost eCheck option—such as $3 for an eCheck versus a percentage fee for a credit card.
Handling paper checks is cumbersome: once the check arrives, you have to open the envelope, scan the check, and either upload it or take it to the bank. Even valuing employee time at $15 an hour, processing checks is costly. Accepting check payments online eliminates the need for scanners or faxes, saving your agency time and money.
Say goodbye to paper checks and let your insureds pay online via eCheck—it's simply easier.
Reason #3: Your Insureds Will Thank You
Consider the experience from your insured's perspective. Imagine being a business owner who receives a call from your insurance agent reminding you that payment is due and your policy will expire if not paid immediately. When you ask how to pay quickly, the agent asks you to write a check and drive it across town in rush hour traffic.
In an age where businesses strive to make things easier for customers, allowing insureds to pay from their office, the field, or home makes sense. Your insureds will appreciate having this convenient option.
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