Credit cards for commercial

[JAM]

As you know many Insurers dot accept CC for commercial polices or dont accept AMEX. I was wondering if anyone has done their own CC processing like paypal etc... Any ideas and the pros and cons would be appreciated.
Thanks

[KPIA]

Well, suddenly you will find a huge chunk of your commissions going up in smoke to credit card fees. So be prepared to either make a lot less net income on those accounts, or explain some higher fees to your client.

If you make 10% commission and give 3% of that away in Paypal fees, you do the math. Then think of that 30% decrease in gross revenue in terms of net revenue. HUGE hit.

For a successful business, the convenience of using a credit card is by no means a make-or-break feature. If the client can't pay otherwise pay their insurance premiums, well, they will be your problem child.

Just my opinion, your mileage may vary.

[SteveAnderson]

As mentioned in the prior comment, traditionally it has be very hard for an agency to justify the charges incurred when accepting a CC for payment of premium. There is also the issue of taking a conditional payment to allow time to verify the policy is actually in force.

There is one company I am aware of that processes CC payments for an agency at no cost. I know it sounds too good to be true, but it is. Additional information is located at: http://www.simplyeasierpayments.com/agencyversion.html.

Obviously you need to do your own due diligence. While many states have approved this particular company (NY for example) for payment processing you will need to verify with your own state insurance department and the state consumer protection department to make sure they allow this type of payment process.

Steve Anderson
http://www.steveanderson.com

[beyert1]

I do quite a bit of business in the non-standard market along with all other lines. I actually have a different office suite for the non-standard. So - with that in mind I must accept debit and credit cards and do so on a regular basis. With the non-standard market you have many companies who do not accept CC by will accept EFT payments. What I have put in my fee schedule, which each and every client signs, is a fee of $5.00 for a CC/Debit transaction. If I am charging the initial fee for the client we do not charge for the CC transaction. I already have this built into the inital fee so I am covered.

The primary reason falls into rebating. If I take the full payment from the client via CC, I must pay a percentage to the processing bank, mine is Capital One and I must say they are wonderful all the way around as a bank, when the insuring company withdraws the funds, they are taking the full payment but I was only paid the amount less the processing fee. So in turn I am paying a portion of the clients payment thus, rebating.

A majority of my clients have payments of anywhere from $30 to $200. On some of the payments I am making some extra which in turn helps off-set the ones which are a little larger. This way, I am not rebating any amount to the client for their payment.

For my standard companies which include P&C and commercial business, most of my companies take credit cards so I don't worry about these. But for my commercial account which have initial fees, I have built these in with a tiered system, the larger the premium the larger the fee. I have explained this to my clients and they understand fully. With a majority of my commercial companies the payments may be processed through their system via CC so I am not forced to run their cards.

As for AMEX and Discover, stay away from these. Why you ask? Very simply, they take for ever to deposit the amount into your account and the fees are almost double of everyone else. I only take Visa and MasterCard. They normally pay within 24 to 36 hours. This gives you plenty of time to make sure the money is in your account when the sweep happens.

I hope this helps with your decision.

[Island Girl Agent]

The insurance commissioner in Hawaii told me they will not allow us to make any kind of charge for a credit card transaction, fyi. You may want to check with your state commissioner's office before going down this road. The profit margin on P & C is already so thin, there is no way we can make this work. Cash or premium finance, period. Even some of our commercial insurance carriers have stopped taking credit card payments.