Spotlight: Payments - The competitive difference in digital adoption

Digital technologies are creating new avenues for customer engagement and serviceability in more cost-effective ways. But one technology that often gets overlooked
is payments.

Payments are a critical step in the customer journey and, when done well, can create new opportunities for customer acquisition, increase customer loyalty and drive revenue. As new payment methods continue to emerge, like digital wallets and buy now, pay later options, insurers will need to evolve their payment experiences to align with consumer expectations.

Insurers that invest the time into developing a strong payment strategy will have a competitive advantage and the ability to create better customer experiences while reducing servicing costs.

Self-service is key to building better CX

As insurers look to develop more customer-centric experiences, enabling self-service apps and dashboards will be the first logical step.

Digital self-service options put customers in control, giving them greater choice and the ability to manage their policies when and how they want to. From paying and renewing policies, through to managing claims and smaller tasks like updating payment methods or contact details, self-service technologies can deliver more customer-centric experiences than ever before.

Payments are a critical part of the self-service mix, often perceived as a point of friction in the customer journey. So how can insurers use payments to improve their customers’ experiences and achieve a competitive advantage?

Firstly they can allow customers to pay and renew their policies using the payment options they like and trust across any device. From digital wallets, to debit and credit cards, or buy now, pay later options. Offering customers the payment flexibility they’re looking for can reduce friction and help increase customer satisfaction

They can also enable self-service claiming to put customers in control and give them better insight into their policies and processes. Reimbursements reaching their account almost instantly is another point of customer delight.

Another benefit is helping boost payment approval rates by accepting digital wallets. With multiple cards or bank accounts linked to one digital wallet, the payments provider can call on each as needed to fund the transaction. Customers can pay on time with ease and not worry about gaps in their insurance coverage. Insurance companies also no longer have a heavy reliance on often manual arrears collection processes.

Finally by integrating a trusted payments provider, with a focus on security. insurers can provide peace of mind that their customers’ personal data is secure.

Driving acquisition and loyalty

Membership benefits and third-party cross-promotion have been long-standing expectations of insurers. From discounts at gyms for health insurance to roadside assistance for car insurance, the value-add is part of the consumer decision-making process. Historically, these have only been made available through the acquisition of third-party providers or manual reconciliation processes.

Today, payment providers can help insurers unlock new opportunities for strategic partnerships and turn difficult tech integrations into seamless experiences. Insurers can share customer and payment data with strategic partners without exposure to risk.

Allowing customers to opt-in for insurance as they shop on another site, for example travel insurance when booking a holiday or buying insurance for a smartwatch or laptop at the point of purchase, can be a simple yet highly effective way to acquire new customers and delight existing ones.

Defining payment needs for insurers

As insurers look to evolve their payments technology and customer experiences, there are three key considerations: customer experience and trust, flexibility and control, and risk and fraud.

Modern payment platforms can help insurers streamline their payments ecosystem while offering flexibility, scalability and reach. With the right payments provider, insurers can take control of their payment acceptance, as well as payouts of claims.

PayPal, for example, can act as both a gateway and acquiring partner, enabling choice of payment types to fit each customers’ specific preference, including credit and debit cards, most relevant digital wallets and buy now, pay later options.

As data security remains a major concern, leveraging an integrated, adaptive machine learning solution will help protect both insurers and their customers against evolving fraud threats. Modern payment platforms can also help ensure that payment data is stored and shared securely under one umbrella company using tokenisation to reduce friction and improve conversion and approval rates.

Customer-centric experiences that make payments and reimbursement on claims simple will be key to growth, while improved authorisation and reduced fraud rates help protect the bottom line. And one centralised reporting and reconciliation platform can improve operational efficiencies and deliver insights to support insurers as they develop compelling products and experiences that drive loyalty and acquisition.

Choosing the right payments partners

When it comes to choosing the right payments provider, insurers should prioritise a trusted partner who will work alongside them to understand their business, provide solutions that meet their needs and integrate with their existing infrastructure. They should look for innovative companies with a global scale that consumers know and trust.

As customer expectations change at an increasingly rapid rate, insurers also need to work with partners who understand the importance of the consumer experience across payment processes, like checkout and funds management, and the value that optimising these can deliver to a business.

And as security threats continue to grow, partnering with payments providers with global scale and mass payment volumes also bring the value of improved fraud mitigation, protection and security. Their insights and data stores also allow for increased adaptability as insurers change and grow.

In conclusion as digital transformations continue across the insurance industry, the leaders will be those that leverage payments technology, recognising it as a catalyst for growth rather than an endpoint in the journey. Using payments to drive customer-centric experiences rather than friction can be the key to their success. 

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