In a recent poll of C-level executives conducted by DataPath, payment administrators answered a range of questions regarding indemnity payment processing. The inquiries sought to better understand the challenges and industry trends that payers experience. Among the questions posed, the main focus centered on payment types, frequency, cost, and other related issues.
3 Major Indemnity Payment Findings
Here are the top indemnity payment issues identified:
- Issuing timely or accurate payments was listed as the most reported problem
- Cost of processing payments was the second most listed challenge
- Many administrators reported a rise in indemnity payments during the past 5 years
Believe it or not, the three major answers in the poll are related.
Fact is, check writing is expensive: checks can cost up to $8 per payment. The cost of check writing includes paper, ink, overhead, and postage fees. A payer who issues hundreds or thousands of checks per year bears a high cost burden which affects the bottom line.
In addition, with timely and accurate payments seen as a major concern, the cost of check writing adds up. Consider what happens if a check has to be canceled and reissued due to an error, or the payment is stolen and/or doesn’t make it to the recipient. Then there’s the frustrated worker who needs the payment in order to take care of day-to-day needs, and is calling upset and angry about where the money is.
Another notable finding is that nearly all administrators polled deliver payments by check and a significant amount also use electronic funds transfer (EFT). EFT payments are more affordable than checks, however, they are also prone to incorrect distribution and duplication. With many administrators issuing more payments, especially using methods that are costly and liable to error, they need a better, more affordable way to pay.
The Solution: Reloadable, Bank-Neutral Debit Card
For payers, there is a real world solution: a reloadable, bank-neutral debit card. Indemnity payers need to find a suitable partner that processes payments and issues cards; it is preferable to go with an end-to-end card and payment processor who handles the entire operation. Eliminating check writing speeds up and secures the entire payment process, in addition to reducing costs.
When it comes time to pay a claim, the card processor issues a preloaded card. The card is sent to the injured worker, who registers the card and sets up a PIN. Payments can be setup on a schedule to ensure every payment is accurate and on-time.
Workers can use the card everywhere major credit cards are accepted, and even withdraw funds from an ATM, if needed. They no longer have to wait on a check to arrive in the mail, then find a place to cash it if they don’t have a bank or access to a bank. With a reloadable debit card, the funds are available immediately.
RenewCard™ by DataPath is a reloadable, bank-neutral debit card solution for indemnity payments. DataPath is an end-to-end card and payment processor that takes care of every payment related process in-house.