Piloting Immediate Payments

Use Cases and Opportunities to Explore

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Piloting Immediate Payments

Use Cases and Opportunities to Explore

November 2019

By Edward Shane

There is growing interest in the adoption and deployment of Immediate Payments by the insurance industry in North America. The need to transform workflows to accommodate digital payment technologies has never been greater as insurers seek to reduce expenses, eliminate dependency on paper and transact with policyholders demanding an electronic-based, immediate and transparent user experience. The stakes have never been higher nor the timeline more compressed for insurance companies to evolve or risk the dual consequences of bloated expenses ratios and policyholder attrition.


The terms Faster and Immediate Payments have quickly become generic industry catch phrases for those transactions processed through  Early Warning’s Zelle®, and The Clearing House’s Real-Time Payments (RTP®) networks. The growing adoption of these networks can facilitate multiple outbound payments applications, including those originated to insureds, business partners and vendors. Obvious applications include the payment of claims to insureds and services providers. There is, however, a litany of additional outbound payment types that are ideal for digitization.   


Often overlooked and certainly worth highlighting is the revolutionary impact to the premium collections process that is likely to evolve from the RTP Request for Payment (RFP) functionality. Insurers are quickly learning that they can transact directly with their customers by utilizing the messaging component of the RTP Network® to instantly present premium collection e-bills with data-rich remittance information.


Leveraging the BNY Mellon RTP RFP message solution enables the e-bill to allow your insureds to view the request and payment-related information and be presented with an option to pay instantly. Once the payment is processed, final, irrevocable funds are instantly credited to your account at BNY Mellon.


I’m Interested – But Where Do I Start?


Most companies are intrigued with the notion of payment transformation but uncertain of dipping their toe into these uncharted yet enticing waters. Many of the insurance clients we speak with don’t know where to begin or what barriers of entry they might encounter with Immediate Payments transactions.


To help with this effort, we have compiled a set of use cases at the business application level to provide recommendations for piloting Immediate Payments and conducting proof-of-concept (POC) experiences that can be leveraged for large-scale rollout at the enterprise level.


The following chart offers payment channel options and collections scenarios we recommend your organization consider testing along with the appropriate processing network applicability:

Outgoing Payments - Piloting Options for RTP & BNY Mellon Tokenized Payments – Now Available with Zelle

Business Application Potential Proof of Concept Scenarios Network Applicability
Accounts Payable Consider testing with select vendors to make time-critical A/P payments. RTP Only
Annuity Payments Select clients with time-sensitive annuity withdrawals able and willing to provide banking or email data. Both
Claims Payments to P&C Insureds Offer to select claimants requesting an immediate claims payout. Both
Commissions Solicit key or high-profile agents for an initial pilot program to receive commission payments. Both
Death Benefits Offer to select beneficiaries requesting a time sensitive/ immediate payout. Both
Intercompany Payments Test POC via domestic intercompany cash movements. RTP Only
Loans and Withdrawals

Initiate policy loans and withdrawals to a controlled group of policyholders.

Payroll Use a select group of employees to act as a control/test group for piloting. Both
Refunds Solicit clients due refunds for faster payments settlement. Both
Required Minimum Distributions (RMDs) Consider initiating RMDs to clients with time-sensitive or reoccurring payment needs. Both

Collections - Piloting Opportunities for RTP Request for Payment

Business Application Potential POC Scenarios Network Applicability
Automated Clearing House (ACH) Debit Clients Test RFP transactions using current direct debit client data. RTP Only
Agency Collections Consolidation Consolidate premiums collected by agents via RFP messaging. RTP Only
Initial Premium

Capture banking information at the time of policy application to trigger on-the-spot payment requests.

RTP Only
Overpayments Message clients requesting return of retirement or pension overpayments. RTP Only
Paper Billing/ Lockbox Collections Initiate RFP e-bills using routing and account numbers captured from previous lockbox payments. RTP Only
Policy Loan Proceeds Loans to clients with repayment provisions can be tested utilizing RFP messages. RTP Only

Methodology for Getting Started with Immediate Payments: Understanding and Overcoming the Barrier to Entry

The realities of deploying a new payments system can be a daunting undertaking especially if, like most organizations, technology resources are scarce. Absent the allocation of technology for a full-scale “build and test” of the RTP or tokenized networks, it may be difficult for insurers to effectively evaluate the business applications that should be targeted and prioritized.


BNY Mellon can help by lowering the barrier to experiment with Immediate Payments and offering several methods to initiate RTP and tokenized transactions. Your evaluation process can follow these simple steps:


  • Start by identifying your easiest applications or highest priority use case(s).
  • Determine the optimal payment channel for your application (RTP or Tokenization).
  • Begin initiating transactions with online enablement via our NEXEN/TreasuryEdge® portal.
  • Utilize manual entry to demo and develop POCs.
  • Scale usage via an integrated Application Program Interface (API) for real-time connectivity and volume, or utilize a file transfer for bulk payment instructions.
  • Identify, scale and repeat subsequent use cases to achieve higher value and economies of scale.

Keep in mind that the network you choose to test with might also be determined by the client/ vendor/payee information to which you have access. Ready access to previously captured banking information, email or mobile phone number details might drive the network choice in some instances.

Edward Shane

Head of Business Development and Relationship Management, BNY Mellon’s Treasury Services Insurance Segment

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