Finding The Perfect Payment Processor For Your Agency - ePayPolicy

“It’s not us, it’s you.” Several insurance agents that use large payment processors (operating in multiple verticals) have reported being removed from their payment processor, with no other explanation than “our product is not a good fit for your industry.” While the reasons for this are not always clear, there are some educated guesses and, more importantly, solutions.

First and foremost, the insurance industry is highly regulated and involves significant tracking of funds for compliance purposes. Some payment processors are designed for straightforward sales transactions and cannot handle the additional levels of accounting and code compliance required by the insurance industry. In other words, they don’t “speak insurance.” When they say “not a good fit,” it often means they are not set up for a complex, regulation-driven industry like insurance. Here are some likely reasons why they might be rejecting business from insurance agencies:

Insurance Code Mandates and Trust Account Management

Most vendors using large, multi-vertical payment processors have a simple business model: receive payment in exchange for goods or services. No complex accounting is required. Examples include coffee shops, digital storefronts, or food vendors at events.

However, the insurance industry is different. Premium payments in some states are subject to insurance code regulations. When you receive premiums, you are operating in a fiduciary capacity. You are not the owner of the premiums paid but are acting as a fiduciary of those funds. Premiums must be kept in separate trust accounts, segregated from the agency’s business operating funds, to protect them from agency creditors. Funds cannot be removed from the trust account without proper documentation of the commission earned and an audit trail.

General payment processors are not set up for this level of sophistication. While they can handle volume, they lack the sophisticated accounting required for trust account management. This is a significant responsibility with potentially serious consequences. Insurance agents need a payment processor that understands the complexities involved, including terms like net funding and premium funds.

State Compliance and Regulations

Each state has its own set of regulations for selling insurance. Requirements in Ohio may differ from those in New York, California, or Florida. Organizations like the Trusted Choice / Big I associations help agencies maintain compliance with state-specific mandates.

Large global payment processing companies typically do not operate at this micro (state regulations) level. However, insurance agencies must, and so does ePayPolicy. ePayPolicy maintains close relationships with state insurance associations nationwide and is working toward endorsements in all 50 states. These endorsements signal that the vendor understands the industry and can be trusted.

An Insurance Industry-Specific Solution

The solution to these challenges is an industry-specific payment processor. ePayPolicy is a payment processing platform built specifically for independent insurance agents. Unlike general-purpose processors, ePayPolicy was created by insurance professionals for the insurance industry. By focusing on the unique business needs and regulatory requirements of insurance, ePayPolicy streamlines operations and ensures compliance across the board.

Collecting credit card and ACH payments is made easy, and getting started takes only a few minutes.