The State of Online Payments in 2025

It’s 2025, and online payment processing remains alive and well among today’s consumers due to its convenience and security. But of the 96% of users with smartphones, only 65% have reported using a mobile app or browser to pay their bills. What accounts for the failure of policyholders to fully embrace online payment methods? And why have insurers failed to encourage greater digital payment adoption? Special guest Jim Vandanacker, Regional Sales Director at InvoiceCloud joins Andy Labrot, Sapiens’ VP of Product Management, to discuss the state of online payment processing in today’s insurance customer journey.

Andy Labrot|Jim Vandanacker

Andy Labrot: Hello! Welcome to the Sapience Insurance 360 podcast. I’m your host, Andy Labrot, VP of Product Management at Sapiens, and I’m so glad that you’re out there listening. This is where we discuss the latest news, trends, and issues from across the insurance solutions and technology spectrum.

Well, we’ve turned the calendar to a brand-new year, 2025. But as we all know, some things never change, such as paying bills. However, the way consumers pay their bills does change, and like most business sectors, insurance carriers want to embrace technology to make it easier and more secure for their customers to pay their bills electronically. Research shows that two-thirds of Americans have used their mobile device to pay a bill in the past 12 months. And so an even more optimized mobile experience is yet another incentive to get consumers to pay their bills digitally.

And of course, next generation payments systems can always provide carriers [with] a quick win by successfully impacting customer retention, operational efficiencies, and time and cost savings. But before I give all the program highlights away, let me introduce you to today’s guests to discuss the state of online payments in 2025 in the insurance market is Jim Vandanacker, Regional Sales Director at InvoiceCloud. InvoiceCloud is a Sapiens partner and their mission is to simplify payments and collections through improved, innovative SaaS technology that improves customer and client engagement. So, Jim, happy new year and welcome to the program!

Jim Vandanacker: Thanks, Andy. Happy new year to you as well. Glad to be here!

Andy Labrot: So Jim, to first off, let me ask you some very basic questions. How do most consumers today pay their insurance bills, and how do you think they want to pay their insurance bills?

Jim Vandanacker: Great question, Andy. So there’s really two trends of thought that I would say that we all experience when it comes to payments, and I echo your questions when it comes down to it. What do we know and what do we want?  Now, I know that I can save my payment method information most times on my biller’s website, so I can use it again for when I log in. But is that what I really want? It’s a still a semi-manual process, so no it’s not. I’d rather have an automatic notification, automatic authorization, and drafts for my account, so I know my bill is paid, and I believe that most of society feels the same way. However, as a society, we don’t frequently take advantage of modern automation and communication advances in technology, and that can either be on the fault of the consumer or the fault of the billing entity, or both. A recent 2024 study showed that 96% of Americans, and we all have smartphones. That’s over 310 million people who don’t have the capabilities with them 24/7, to take advantage of technology. Yet only about 65%, about two thirds of people have reported even using a mobile app or browser to pay their bills. In many cases, I think those people just don’t know what their options are, and they want to pay their bills and receive payments at greater convenience transparency with their insurance providers.

Andy Labrot: So maybe the holdup is for more, a more universal adoption?

Jim Vandanacker: I think it really does come down to that communication part, with the consumers and because of the technology that’s available. The insurance industry has always been slow to adapt to technology. And now that it’s kind of catching up, there are portals, there are websites, there’s automated tools. Like I said, these supercomputers that we have in the palm of our hands every day need to be taken advantage of. And those modern technologies are available today, but people just don’t typically know about it.

Andy Labrot: It’s not because they don’t trust it?

Jim Vandanacker: I think it’s just a lack of education. I think the trust will be there. But once this, once the education is there that will develop the trust. I mean that’s why you’re going to buy an insurance policy anyway right? From a carrier. Like you’re trusting this insurance company to be there in your greatest time of need.

Andy Labrot: Well, that’s a great segue, Jim. Let’s switch gears for a moment and let’s talk about claims. How are claims typically paid out today versus how you believe customers want to receive their client payments?

Jim Vandanacker: Honestly, and this is my favorite topic, claims payments. So yeah, let’s dig into it. So, we’ve all seen an influx of natural disasters lately. Year over year, and they seem to be more frequent. So let’s take the most recent catastrophic events from Hurricanes Helene and Milton in the Southeast. Florida and North Carolina [were] left devastated among the other impacted end zones, [and] have policyholders that have lost everything, every personal item, along with their home. So, how is an insurance company going to communicate with them? How are you going to send them a check when their home is washed away and their mailboxes a quarter mile down river? It absolutely blows my mind on how many carriers still use manual processing and sending out checks as a default distribution method. And look, I get it. I get the “if it ain’t broke, don’t fix it” mentality. But is that what your policyholders want? Is that what they really need? And I’ll tell you right now, it isn’t. How is as an insurance carrier, are you going to be the superhero that the family needs in their most critical time of loss, when they can’t get even a phone call in or receive mail?

It is so important that the carrier and the policyholder embrace technology to get the money where it’s needed immediately. And a lot of what we see really is that, once again, lack of communication. What options are available to policyholders? Are these customers aware of the choices that exist due to our connected banking and or real-time transactions, even digital wallet options? These are new things that people don’t know about. Andy, I’m sure you’ve heard of PayPal, Venmo, Apple Pay, Google Pay. You may have used it, but those are actually options that are available to both pay your bills and also receive claimants. And a lot of people don’t even know that’s available.

Andy Labrot: Well, since claim payments are such a critical factor when it comes to retention for carriers. And as you pointed out and, policyholders in times of need are really tuned into their favorite radio station, which is WIFM? Which is “what’s in it for me”? Getting payments the fastest way possible is, it would be clearly a benefit to the policyholder and be largely beneficial to the carrier for from a retention perspective. What other options do you see in that area for carriers to pursue?

Jim Vandanacker: You know, the short answer of how people want to receive their payment is instantly. It’s a great concept that everybody wants to execute on. But how is that done in the most convenient and transparent way possible? Because the advances of technology and digital wallets, as I mentioned earlier, they’re also new styles of connectivity behind the scenes, that carriers know of and other partners, like we know if you’re InvoiceCloud, regarding real-time payments and transactions that makes payments occur instantly, not within 24 hours, but within minutes, or the modern method of ACH, which could take up to three days, which is the most typical electronic method of digital phone transfers. I think the most critical lines of business that this can really apply to, where you want instant claim phone availability, applies to Homeowners’ Insurance, Flood, Workers’ Compensation. But let’s not kid ourselves; when the claim happens, as we mentioned earlier, policyholders want to be made whole again by their insurance company that they trust.

Andy Labrot: Well, Jim, that’s a fantastic answer. So last but not least, what issues do Americans encounter with digital money? So we’ve talked about speed. We’ve talked about why this is a benefit to them. So why hasn’t there been that universal adoption saying we want this and we want it now, you know?

Jim Vandanacker: Understanding the options. Luckily, it’s not a heavy lift on the end of that consumer to set up modern payment methods. I know that some of these digital wallet methods, people may have never heard of them before, but it is actually easy to set up. I was actually in London recently, and I had no idea that their modern way of paying everything is by, no contact. So I downloaded that digital wallet app on my phone and I could pay everything with it. My bus pass, my train pass, everything. And it’s fantastic. Now I have this payment method that I can pay with groceries. All these digital methods are fantastic and need to be embraced, because it’s not just on consumer transactions day-to-day, but like we mentioned, you can pay your bills, you can receive claimants. If I have something that happens and I can get a rental car, I need money for rent for as a home replacement for my house that got washed away. You know, I can get that instantly. And that’s made available and a lot of modern vendors are accepting these digital wallets. And I think it’s, once again, just an education point of view. And [at] InvoiceCloud, we take a great amount of pride in being able to be that strategic partner for insurance providers to help create an innovative, convenient, and secure payment method to make customers happy.

Andy Labrot: Now that’s fantastic. Thanks for your time, Jim. Anyone on insurance knows that the billing and payment experience is a critical touchpoint in the customer journey, and so streamlined, sophisticated payment systems will remain in demand for the foreseeable future. We really appreciate your insights on the topic, as well as InvoiceCloud’s continuing partnership.

To our listeners, as always, thank you so much for spending your time with us today. We love hearing from you, so if you have any comments or would like to follow us on social media, please reach out to us in our channels. We have lots of fascinating topics and subject matter experts ahead for 2025, so don’t forget to subscribe to the podcast. We’ve got more coming, so stay tuned for our next Sapiens Insurance 360 podcast.