Network Tokenization
Improve your Combined Loss Ratio by Reducing Credit Card Expense and Increasing Customer Retention
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Improve your Combined Loss Ratio by Reducing Credit Card Expense and Increasing Customer Retention
Network tokenization is the #1 action Insurers can take to mitigate rising credit card costs. We’ve partnered with Visa to provide network tokenization via our PremiumPay® inbound payments product, allowing us to tokenize Visa, Mastercard, and Discover credit cards directly with issuers.
As more consumers shift to online bill payments, payment optimization is essential for insurers to grow their bottom line. Implementing an effective payment optimization plan that includes network tokenization can increase revenue, lower costs, deliver a better customer experience, and help you stay ahead of your competition.
The positive financial impact from network tokenization is substantial, especially for insurance companies with high volumes of transactions. Even a marginal decrease in interchange fees and payment declines can have a huge impact when applied across thousands—or even millions—of monthly transactions.
Visa, Mastercard, and Discover have implemented one of the largest interchange fee increases in the last decade. According to interchange experts at Optimize Payments, the average insurance company will see a 4% to 6% increase in credit card costs for online payments.
Visa is offering interchange rate reductions on qualifying transactions when using network tokens.
Issuers are more likely to authorize transactions that use network tokens because with network tokenization, card brands go directly to the issuing bank to verify the legitimacy of the card. That means more successful premium payments, happier policyholders, less customer support calls, and an increased likelihood for repeat transactions.
Per Visa, transactions using network tokens can reduce fraud by nearly 26% and have an average authorization rate increase of 2.2%.
More than two-thirds (69%) of US consumers choose to store a card-on-file or have recurring billing set up with merchants to avoid manual key entry.3 But problems can occur in this scenario when cards need to be reissued for any reason. Visa research found that merchants generally reach out to customers 2x -3x times to try to update card details before cancelling services.
For insurance companies, this amounts to greater resource allocation and higher operational expense. For policyholders, these issues can result in insurance policy lapses or cancellations. But with network tokenization, tokens can be updated immediately to prevent recurring payment transactions from failing.
Automatic card updates ensure installment plans and auto-renewals persist seamlessly when a card is replaced or updated.
Network Tokenization It packs quite a punch!It helps to increase revenue, decrease costs, and improve policyholder retention and persistence. And the improvement in customer experience is priceless.
