The advent of real-time payments, account-to-account transfers and card disbursements makes it easier for consumers to receive claim funds much faster than waiting for a paper check. State Farm Insurance Cos. Is one of the latest providers with its release earlier this month of Digital Pay, a service provided by Fiserv Inc. that enables the payment of digital claims.
With the new service, customers can choose automatic clearing house payment, transfer money directly to a payment card, or use PayPal, Venmo, or a PDF check. A PDF check is an emailed image of a Check 21 compliant check that consumers can deposit using remote deposit capture technology.
Fiserv’s Carat The unit, which launched in November, manages the service for State Farm. Insurance companies and many other types of businesses are considering digital payments because they provide speed and accuracy to transfer funds to consumers, says Nandan Sheth, head of Carat and digital commerce at Brookfield-based Fiserv in the Wisconsin.
While State Farm is among the last, Sheth says he is iconic for companies seeking these services. “At a high level, there are significant opportunities for digital transactions and payments,” says Sheth. “Over 60% of these payments are still made by check.”
State Farm sees Digital Pay as a way to speed up payment delivery, while giving its customers the choice of payment method and making it easier for them to sign up for the service. Fiserv provides application programming interface code to enable the service with State Farm.
“We really focused on business-to-consumer,” says John Beisner, vice president of Carat and digital commerce. One of the challenges for insurers was to digitize the “last mile” that really hits their customers, says Beisner. “They needed to digitize ASAP.” Carat allows them to associate the payment with the customer and improve the user experience, he says.
Other industries love these items as well. One example is an unnamed airline that is considering digital payments as a way to reimburse travelers for lost baggage or to pay compensation if they are evacuated from flights, Sheth says.
Sheth says there has been “explosive growth” in the business over the past 12-18 months, which he plans to accelerate. The main reason for this prediction is that many organizations will want to cut costs and get the best value for money for these services. Digital payments can also be a differentiator, he says. And some segments, like insurance claims, are well suited for fast digital payments, he says, as are other markets such as cryptocurrency wallets, online gambling, and workers on the internet. request.