July 02, 2024

Podcast: Insurance Company Moves Away from Checks and Never Looks Back

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Shauna Wesley-Baxley remembers a time when Johnson & Johnson Insurance made all its payments—from vendor and payroll to consumer reimbursements—by check, and she’s not nostalgic for it.

“A nightmare between filing and trying to keep track of everything,” said Wesley-Baxley, Vice President of Accounting, who has been with the Mount Pleasant, South Carolina insurer some 26 years. Johnson & Johnson Insurance was founded in 1930, and now has more than 380 employees and $1 billion in revenue in 2023.

Speaking on Nacha’s Payments SmartCast podcast, Wesley-Baxley said Johnson & Johnson Insurance now relies heavily on ACH, which has eliminated the old 30-day turnaround time for issuing checks. “Our clients like it because they can get it in their bank account and see it,” she said.

JJ has a goal to be 100% check free by 2028 and is well on its way, with 90% to 95% of its receivables now received electronically or via lockbox. “We are at least 60% electronic on vendor and company payables and our next big tackle will be consumer reimbursements,” said Wesley-Baxley.

The faster qualities of ACH, including Same Day ACH, make it an excellent choice for insurers, said Brad Smith, Nacha Senior Director, Industry Engagement and Advocacy.

“You can do Same Day for payouts and refunds,” said Smith, noting that helps people waiting for claims get their money “as fast as possible.” He also cited another advantage of ACH for insurers.

“Getting paid for your premiums, I think ACH is a much better option than checks. You’re looking at lower costs, you’re looking at better security,” said Smith. “Moving—and staying—away from checks saves businesses a lot of money.”

Eliminating checks is part of the equation for Synovus Accelerate™ Pay, which relies on its clients’ payees to choose how they wish to be paid. Payees enter their payment preferences and any related information through a secure portal.

“The solution allows our clients to stop producing all checks from the very first day of use,” said Laura McGortey, Director and Product Group Manager of Payments at Synovus, a Columbus, Georgia-based financial services company. “Even so, the payees can still receive a check, if they wish but I have to question who would actually want that, because they’re in full control of how they get paid.”

Synovus partnered with DPX Payments for Accelerate Pay. Todd Tracey, DPX Senior Vice President, Strategic Alliances, said it makes businesses feel more secure about electronic payments.

“It takes what has normally been concerns by the owners of these businesses around security of the account and routing information to reconciliation, and just boils it down to a simple solution that saves them time and adds a higher level of security than they might have today, and enables them to finally use some of these payment modalities, like ACH, that they currently are not comfortable doing,” said Tracey.

Much more was discussed. Listen to the podcast in its entirety.