| TECHNOLOGY & YOUR AGENCY |
Industry must update payment process
By steve anderson
he sale is not final until
the check clears the bank.
That was the mantra my
father-in-law drilled into
me during my first years in the
insurance business. Getting paid for
the insurance policies an agent sells is
a crucial part of running a successful
insurance agency.
T
How agencies have handled the
payment process has not changed
much over the years – send an agency
invoice, receive the check in the mail,
and deposit it into the bank. Direct
Bill moved some of the burdens of
collecting money to the insurance
company, but also transferred some of
the customers loyalty from the agency
to the company.
today’s consumers
demand payment options
Today’s consumers are demanding
more payment options than
ever before. It is these changing
expectations of agency clients
that require you to begin to think
differently about how you get paid
for the policies you sell. I have a
friend in Dallas who owns a business
and charges over $20,000 of business
expenses a month on a credit card to
earn the points.
According to the latest New York
Federal Reserve study on non-cash
payments, the use of paper checks has
gone from 37.3% of total transactions
in 2003 to 18.3% in 2012 (the latest
4
year available). The use of debit cards
has correspondingly increased from
15.6% in 2003 to 47% in 2012.
mobile payments
on the rise
For at least the past six years, payment
companies have been trying to figure
out how to take advantage of mobile
devices to make the payment process
easier. After some false starts, this
next shift in payments is gathering
steam. Worldwide mobile payment
transactions totaled $235.4 billion
in 2013, a 44% increase from $163.1
billion in 2012, according to tracking
firm Gartner. They project a 38%
jump to $325 billion in 2014.
Starbucks customers can download
the company’s app to their phone,
load it with a credit or debit card and
then pay at most of the coffee chain’s
11,437 U.S. locations. They just open
the app, tap on Pay and wave their
phone under a scanner at the counter.
Mobile device payments now account
for more than 11% of payments
at Starbucks stores in the U.S. and
Canada. I use the app to pay at
Starbucks and as a bonus receive
a gold star as part of their reward
program. After 12 Gold Stars I receive
a free drink. A great example of
capturing a mobile moment and
increasing customer engagement.
Other merchants have implemented
variations on the Starbucks model.
KANSAS INSURANCE AGENT & BROKER |November-December 2015|
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