MedCity Influencers, Health Tech, Payers

Why it’s time for your practice to adopt digital payments

For both providers and patients, digital wallets offer greater convenience, ease of use, efficiency and security than traditional methods of medical bill payment.

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Virtually anyone with any connection to the healthcare industry understands that the Covid-19 pandemic accelerated consumer adoption of telehealth. But what’s less recognized is a similar evolution that’s underway in the space of digital wallets.

Digital wallets, such as Apple Pay, Google Pay and Venmo, are mobile versions of consumers’ financial accounts that are easily accessed with a computer or smartphone and eliminate the necessity for consumers to carry traditional, physical wallets. Consumers may make payments with digital wallets at in-person payment terminals, apps and websites—and healthcare is starting to take notice.

Consumer interest in digital wallets has surged recently, coinciding with the pandemic. For example, a report from eMarketer found that in-store mobile payments usage grew 29% in the U.S. in 2020, the first year of the pandemic. That same year, 92.3 million U.S. consumers aged 14 and up used mobile payments at least one time. Half of all smartphone users are expected to use mobile payments by 2025, according to the report.

In the healthcare industry, caution against Covid-19 infection similarly drove interest in mobile, digital payments. For example, a U.S. Bank survey several months into the pandemic revealed that 25% of U.S. healthcare consumers reported paying via contactless debit or credit because of infection fears. That amount exceeded the percentages who reported paying via their provider’s online portal (23%), an online money transfer service (18%), mobile app (17%) and text (11%).

A quick primer on digital wallets

For both providers and patients, digital wallets offer greater convenience, ease of use, efficiency and security than traditional methods of medical bill payment.

To begin using a digital wallet, consumers must first enter their credit card details into an app or website from the digital wallet services of their choice, an action that only needs to be performed once per service. Then, digital wallet technology encrypts that information so only that one consumer can authorize the wallet’s use.

Once the consumer’s account is set up, using the digital wallet for payments is easy. In a customer or patient present environment a user simply holds his or her mobile device close to a card reader, which authorizes that transaction and enables payment to be transmitted by near-field communication (NFC) technology.

Once the user’s mobile device detects an NFC signal from the card reader, the device prompts the user to authenticate the transaction, often with a biometric signature, such as a fingerprint or facial scan. With no physical card changing hands, plus secure encryption and tokenization of the stored card, the process is much more secure than using a traditional credit card.

To tell whether a business is equipped to accept mobile transactions via digital wallets, look on the card reader for an NFC icon, which features waves that look like a sideways Wi-Fi symbol. For providers, adopting digital wallet capabilities is simple and convenient and only requires an NFC-capable device, which is a common feature among newer payment terminals. Merchants pay the same transaction rate as a standard swipe or dipped credit card.

In a customer-not-present environment, such as in e-commerce shopping carts or with patient portals, digital wallets make the user experience just as easy. When the user checks out to pay for a product or service, the website automatically detects the user’s browser version and checks to see if the user has set up a digital wallet.

For example, a user will only see the option to pay via Apple Pay digital wallet if they are using Apple’s Safari browser (mobile or desktop), and then only if they have set up an Apple digital wallet. Similarly, a user will have the option to pay using Google Pay only if set up with a Google Pay wallet. Once the site detects browser and wallet information, it displays a logo for the available digital wallet provider, allowing the user to complete the transaction using their mobile wallet or possibly other alternatives such as a credit or debit card.

If the user chooses the mobile wallet option, they are then required to authenticate the transaction, often with a biometric signature, such as a fingerprint or facial scan. Just like in a customer-present scenario, no physical card data is transmitted to the e-commerce or patient portal’s website. Instead, the process leverages payment tokens, which significantly minimizes the risk of card data breaches.

What digital wallets do for patients and providers

The primary reason behind the growing popularity of digital wallets is no mystery: Digital wallets enable mobile, digital payments that replace cash and credit cards with a fast, easy, safe method that requires no buttons to push or bills to exchange.

In addition to facilitating payments, digital wallets can be used for other functions that are valuable in healthcare, including the storage of patient details about payment preferences, payment plans, automatic payments, maximum payment limits and address information.

Perhaps the greatest benefit that digital wallets deliver to providers, however, is the increased security of patient financial information through tokenization and encryption, enabling greater peace of mind and confidence in the integrity of payment systems.

The Covid-19 pandemic has accelerated adoption of digital wallets, which consumers find easy and convenient. For organizations who have not yet implemented contactless payments, now is the time for providers to explore their options.

Photo: atibodyphoto, Getty Images


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Curtis Bauer

Curtis Bauer, Chief Innovation Officer at Sphere, brings more than two decades of payment industry experience with a core focus on product, technology and corporate strategies. He has held senior leadership roles at TSYS, TransFirst and Vantiv. He is responsible for Sphere’s innovative strategic development across all Sphere operations and technology platforms with a distinct focus on developing solutions for clients and partners.

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