How we pay for things keeps changing. From ACH payments to Paypal and Bitcoin, consumers have more ways than ever to pay for things online.
The latest two entries in the world of fintech — or financial technology — are the mobile payment systems Venmo and Zelle.
As a provider of online payment technology for the insurance industry, we’re frequently asked about helping our customers accept payments using these new systems. Lately, that means questions about whether they should accept Venmo and Zelle.
First, an explanation. Owned by PayPal, Venmo is a mobile payment system that allows U.S.-based users to send each other money through a smart phone app. Zelle is a similar system owned by a consortium of banks, including Capital One and Wells Fargo.
These payment methods were created and designed to facilitate peer-to-peer payments between individuals — such as splitting a dinner bill among friends — as well as very limited commercial transactions, like an ice cream truck that wants to accept mobile payments.
That means they don’t really work well for something like an insurance agency, where monthly premiums may be higher than the weekly spending limits on these accounts.
The Terms of Service for both Venmo and Zelle are clear on the reason.
Venmo states that you may not use it for “credit repair, debt settlement services, credit transactions or insurance activities,” while Zelle states that it is “intended for personal, not business or commercial use” except for “eligible small businesses.”
It is always a good idea for a business to try to accommodate requests from customers. It is also a great idea for the insurance industry to be more forward-thinking in how to accept premium payments.
But if your customers are asking about Venmo and Zelle, the best thing to do is share with them the above information and then talk about alternatives. Remember, your insureds are asking because they are looking for a more convenient way to make a payment.
Whether that’s setting up ACH or credit card payments for online or mobile phones, there are ways to let your insureds pay that can be just as convenient as Venmo and Zelle.