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Case dismissed: Digital payments outperform checks in class action disbursements

Class action lawsuits can take years to negotiate and for courts to approve a final settlement. Historically, managing settlement disbursements have been equally time-consuming due to labor-intensive, and costly check-cutting processes.

Digital payments are now changing the disbursement process and creating greater efficiencies for litigators, claim administrators, and payees.

The use of digital payments had lagged from the court system’s initial foray into digitizing the class action process with the adoption of the 2018 amendments to the U.S. Federal Rule of Civil Procedure, notably Rule 23(C)(2)(B). This rule allowed class-action notices to be conducted through electronic channels such as emails and social media. With growing consumer preference for electronic payments, it was only a matter of time before court systems would see electronic payment distribution in business-to-consumer legal cases as a viable option for disbursements. Today, more courts embrace digital payment options such as automated clearing house (ACH) deposits, wire transfers, and prepaid and virtual card-based payments.

Checks continue steady decline in usage

The frequency of using checks continues to be on the decline in the U.S. for consumers and businesses. According to data from the Federal Reserve, the use of paper checks amounted to 15% of transactions in 2012 and fell to 8.3% in 2019*. Visa’s unreleased Q4 2021 “U.S. Share of Wallet Report” paints a similar picture with U.S. consumers using checks only 7% of the time to make payments, down from 54% in 1996.

According to Aberdeen Strategy Research and Bank of America, the cost of cutting and managing checks is not cheap either and averages about $7 to $15. In some instances, the cost to disburse checks can reach up to $20, considering the required mailing and processing. These incremental costs add up quickly and can sometimes exceed the settlement disbursement amount. Unclaimed checks from settlement cases create issues related to unclaimed property liability from uncashed checks, which are considered funds outstanding in company ledgers. In class actions, payers must report on the settlement funds, which sometimes leads to the daunting task of tracking down recipients who have not received or cashed their checks.

Digital payments is a win for financial inclusion

Beyond the general declining value of using checks, courts have embraced digital payment as a viable option to address financial inclusion issues. Approximately 25% of U.S. households are unbanked or underbanked. In many cases, unbanked class members receiving checks are forced to pay substantial fees for check cashing services. To open a bank account simply to receive their payments, these class members would be required to open a new account and prove creditworthiness if they have not already.

Issues regarding unbanked populations have been a big challenge to legacy settlement fund distribution. In a cashless system, prepaid cards can ensure that people without bank accounts can still participate and access benefits.

Integrating digital payments enables claims administrators to offer claimants the choice of how they would like to receive payments, from direct-to-bank account options to popular virtual cards / digital wallets.

Digitizing and streamlining the fund distribution process can help create greater efficiencies for legal claims disbursements in multiple ways. B4B Payments provides an innovative and flexible digital payment solution that enables class member settlement and mass tort disbursements to be paid quickly and efficiently with virtual and physical Visa prepaid cards.

Get in touch today to find out how B4B Payments can help you make your fintech ideas a reality with our next-gen BIN Sponsorship services.


*The 2019 Federal Reserve Payments Study,” Federal Reserve

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Why insurance firms should take advantage of fintech innovation

PwC found that 74% of insurance companies see fintech as a challenge for their industry.

But, with consumer behaviours already changing pre-COVID and becoming evermore geared towards digital in the post-COVID world, insurance is at risk of being left behind.

But why is it so important that insurance firms take advantage of the latest fintech innovation?

Reaching a younger audience

Younger audiences are an important target audiences for insurance firms. Getting young people to take out a policy now and making sure that your offer suits their needs means potential customers for life, so getting it right with young people is a must.

Typically, Millennial audiences and younger Generation X consumers prefer digital methods for payments and communications. The less direct interaction with a business, the more convenient it is for this demographic to use a service.

Not only that, but this demographic are far less likely to be loyal to financial companies, swapping and changing as their needs evolve. This means that flexible, digital options are absolutely vital.

But PwC’s fintech global report found that, until COVID-19, apps were seen as ‘nice to have’, which means that many insurance companies and financial institutions might not yet be meeting the needs of a younger demographic.

Today, customers expect a great deal of flexibility, and insurtech offers this. Free from legacy products and processes, they use emerging technologies to build brand new systems and are much more targeted, rather than the old-fashioned end-to-end solutions that don’t meet everyone’s needs.

US insurance firm Metromile is a great example of this: by offering customers pay-per-mile insurance, particularly for those who live in urban areas and don’t drive very often, Metromile can offer customers flexible, bespoke insurance policies that meet their unique needs.

Another good example of a flexible, bespoke approach to insurance policies is life insurance firm Vantis Life. By making use of artificial intelligence, Vantis Life were able to underwrite life insurance policies in the US based on public records and third-party data, which meant that many customers didn’t need to undergo medical tests. Again, this minimal contact between customer and insurer will help to attract younger customers.

And AI isn’t just beneficial for the customer – in early 2017, home insurer Lemonade (also based in the US) reported that its AI-powered technology managed to process and settle a theft claim in just three seconds, without paperwork from the customer. It’s estimated that long claim processes can inflate a claim value by up to 30%, so speeding up the payment process can save insurers a great deal of money.

So making insurance processes simpler, more flexible and – most importantly – digital can work wonders for reaching a younger audience. Do it right, and you’ve got a customer for life, so investment in fintech and insurtech can have immense long-term returns for your business.

Build trust between you and your customers

IBM reported in 2020 that 42% of customers don’t trust their insurer. However, a Salesforce study found that 84% of customers globally say that the experience a company provides is just as important as its product or services.

This means that insurance has a long way to go to meet customers’ expectations. But, through fintech, that trust can be built and the customers’ needs can be placed front and centre.

At the time of a claim, customers might be experiencing loss or trauma, through theft or injury, so the interaction between insurer and policy-holder is delicate. No business wants to contribute to a customer’s difficult experiences but some insurers may be inadvertently doing so.

The last thing that customers want when getting back on their feet is a complex and lengthy process – they want efficiency, understanding and, importantly, speed. The quicker the payout, the sooner the customer can get back to their day-to-day life.

Fintech can make this happen. Solutions like virtual cards can offer a simple method of paying a claim that works for everyone. By issuing these cards when a policy is taken out, insurers can be sure that money is being sent to the right place within minutes of a claim being assessed, making for a much simpler and convenient process for customers than old-fashioned methods like bank transfer or – even worse – cheque.

As well as this, customers who receive regular recurring payments, like disability or annuity, can access funds immediately through a prepaid card.

Understand and build loyalty with your customers

Fintech also provides you with opportunities to provide personalised incentives and rewards for your customers in a way that legacy processes simply can’t, whilst also bringing in new revenue streams for your business.

By forming partnerships with other businesses, you can harness fintech to provide bespoke offers. For example, pet insurance claimants can receive discounts at pet shops or health insurance policy-holders could receive discounted gym memberships, when paid for through their prepaid card issued when taking out a policy.

What’s more, by providing this payment option to policy-holders, you can gather useful data on their spending habits to offer tailored products and services that meet their individual needs. This means you can understand your customers better, provide them with a better service, and keep them coming back.

Fintech is opening doors in insurance – don’t be left behind.

With fintech providing opportunities to reach younger customers and, more significantly, keep them coming back, the importance of insurance firms embracing and investing in fintech in a post-COVID world has never been more clear.

To find out how we can help you embed fintech into your insurance firm, contact B4B Payments today.

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Global and innovative solutions for decentralised trials

The Covid-19 pandemic has had a massive impact on clinical trials. As many people globally were unable or unwilling to leave their homes for a large portion of 2020, researchers had to develop new and innovative ways of gathering information for life-saving treatments.

While decentralised trials weren’t exactly new before the pandemic, only 34% of developers used them and they were mainly for rare diseases, where subjects were difficult to source, for paediatric trials, and for lower level chronic diseases like asthma and dermatology.

Now, though, the global clinical trials market is expected to grow at a rate of 5.7% per year until 2028, and with good reason. Decentralised trials have been proven to be effective and desirable for a number of reasons, a key benefit being the removal of barriers for patients. By bringing the trial to the patient, rather than asking patients to come to you, researchers have found not only a greater number of people willing to participate, but that it’s reduced costs as well.

There’s a whole range of tech out there to make decentralised trials run smoothly, so what does some of that look like?

Wearable devices

The usage and popularity of wearable devices like Fitbits, Garmins and Apple watches have grown massively over the past decade. In fact, the total number of wearable devices in use globally has more than doubled over the past three years and is expected to exceed one billion this year.

While the devices used recreationally to monitor heart rate, sleeping patterns and activity levels aren’t accurate enough for clinical trials, more sophisticated wearable tech, such as skin patches and smart pills, has huge potential. Sensors that track constant, real-time physiological data with necessary precision provide a great opportunity to gather patient data from a distance, without the need to travel to a trial site.

What’s more, the data captured is taken from a real-life setting, with patients going about day-to-day activities as normal, which means that data can be understood and interpreted in context.

And, with similar, commercial devices already very popular, wearable sensors make for a widely understood and accessible method of engaging trial subjects, removing a potential barrier for volunteers and empowering them to understand their own health.

Fluid communications

A key benefit of decentralised trials is the ability to communicate with patients regularly. Without the need to travel to test sites, communication can be much more flexible, fluid and, importantly, accurate.

The use of apps allows patients to make diary entries, complete questionnaires and speak to healthcare professionals from the comfort of their own home or even on the move. Results of trials can be uploaded and analysed in real-time, without the risk of human error in inputting. On top of that, with a virtual distance between patient and healthcare professional, subjects are more likely to be honest and less likely to omit information that they’d rather not discuss face-to-face.

What’s more, virtual communications allow for scheduled updates and reminders to be sent to patients on their mobile devices, meaning that information can be reliably gathered and submitted on time, with minimal fuss.

As well as this, the use of virtual communications tools allows trials to be accessible to multiple languages, meaning that patients can be recruited from a much more diverse, global pool.

And let’s not forget that apps allow for full audit trails and functions for capturing e-consent, meaning that security and protection of patient data can be top-notch.

Incentivising with Fintech

An important aspect of clinical trials is keeping participants engaged and often volunteers are compensated financially for their contributions.

In the context of decentralised trials, fintech innovation can play an important role in keeping patients on board and compliant throughout the trial but also in future trials. Card-based reward schemes can offer participants immediate return on their contributions – for every diary entry submitted or questionnaire completed, patients can immediately access their financial reward through a branded card.

With the ability to reward immediately and virtually, patients can take part in a trial and get immediate return from anywhere in the world. And, with a branded card already in their wallet, participating in future trials will be at the forefront of patients’ minds.

The Covid-19 pandemic has brought decentralised trials front and centre, proven to increase the number and engagement of volunteers. There are a wealth of digital methods out there to help the development of pharmaceuticals run smoothly and effectively – from wearable tech to communication and fintech, global decentralised trials have a range of opportunities available for better data collection and valuable clinical trial results.

To find out how we can help with your decentralisation of clinical trials, talk to B4B Payments today.

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Everything you want to know about… virtual prepaid cards

Online shopping has been on the rise for some time now, and the pandemic has only increased its popularity. Many consumers have now started to shop online for the first time, and safe digital payment methods are needed even more. One such innovation is prepaid virtual cards. In this blog post, we look in more detail at virtual cards and how they work.

What are virtual (digital) cards?

A virtual, or digital card is an online hosted, digital virtual representation of any plastic card. A digital card, unlike a plastic card, doesn’t require any physical representation. Like a traditional credit, debit, or prepaid card, a virtual card allows users to purchase services or goods online.

An advantage of using virtual cards for your business is that the cardholder can use their card immediately. No need to wait for a traditional card to be sent in the mail. As soon as the card is created and funds loaded, the user will receive an email with instructions on retrieving their new card details.

The benefits of virtual cards

Virtual cards have great applications for business with total versatility to be used for a wide range of purposes. They can be used for purchasing items online, offering incentives to staff and clients, managing expenses, the list goes on.

If your business makes a large number of online payments, for example paying for travel, using a prepaid virtual card is a fantastic way to make sure payments remain secure and expenses are within budget. B4B Payments offer prepaid virtual cards that make business payments simple. Virtual cards can be generated instantly via our online managerial platform – the cardholder can then use it immediately rather than needing to wait for a physical card to be sent through the post.

How does a virtual (digital) card work?

Your virtual prepaid Mastercard® or Visa® is a reloadable, online e-money card consisting of a standard card number, expiry date and CVV number, which you can retrieve at any time by choosing ‘Display Card Image’ from the B4B cardholder dashboard.

You can use your virtual card details to make purchases online or over the phone at millions of businesses and retailers anywhere in the world. You cannot use your virtual card details to make in-person payments in a shop.

Can virtual cards be used in my digital wallet?

Not yet. B4B Payments are currently working to provide clients and cardholders access to prepaid cards using digital wallet devices, such as GooglePay and ApplePay services.

Are virtual cards safe?

Yes. Just like a physical card, you must keep your virtual card details safe and secret. However, with a few clicks, cardholders can suspend their account.

If you’re a B4B cardholder, and have any questions, please contact our customer service team directly.

Virtual cards in the future

With online shopping increasing and the use of cash declining, it seems that the presence of prepaid virtual cards will only continue to grow. It’s easy to see why – the advantages of virtual cards both for online shopping and business payments lie in their security and accessibility.

If your organisation could benefit from increased security when you make payments online, B4B Payments can help with virtual cards for businesses. Our efficient system allows you to set up and close down cards quickly and easily, causing minimal disruption to your operations. For more information about our services please get in touch.