Are You Paying a Flat Rate for Insurance Payments? 

Flat-rate pricing is simple. 

A provider may charge roughly the same percentage whether the underlying transaction costs 0.05%, 1.43%, 1.8% or considerably more at interchange. 

That simplicity can be attractive for a startup processing a small amount each month. 

But once an insurance company is processing: 

• $50,000 per month 

• $100,000 per month 

• $500,000 per month 

• $1 million or more per month 

those pricing differences start to matter. 

With interchange pass-through pricing, the actual interchange cost of the transaction is passed through, and the processor's markup is shown separately. 

That creates more transparency and can provide significant savings for the right merchant. 

Debit Cards Are a Perfect Example 

One of the biggest misconceptions in payment processing is that every card transaction costs roughly 3%. 

It does not. 

Visa's current published interchange schedule shows certain regulated debit transactions at: 

0.05% + $0.21 

That does not mean every debit transaction qualifies at that rate. 

Debit pricing depends on the issuing bank, card type, transaction and applicable network rules. 

But it demonstrates why a flat percentage applied to every transaction may not be the most economical option. 

An insurance company paying close to 3% on a regulated debit transaction could be paying substantially more than the card's underlying interchange cost. 

Insurance Companies May Qualify for Specialized Interchange 

Insurance is specifically recognized within card-brand interchange programs. 

Mastercard's current U.S. interchange schedule includes Merit I Insurance pricing for qualifying Insurance MCCs 5960 and 6300. 

For eligible Core Value, Enhanced Value and World consumer credit products, the published interchange rate is: 

1.43% + $0.05 

Higher-tier rewards products may carry higher interchange. 

The important point is that insurance companies should not automatically assume a 2.9% or higher flat rate represents the actual cost of accepting that card. 

It does not. 

Interchange is only one component of total card-processing cost but understanding it is essential when comparing pricing. 

Flat Rate vs. Interchange Pass-Through 

Consider an insurance company processing: 

$500,000 per month 

At a hypothetical 2.90% flat percentage rate, which equals: 

$14,500 per month 

in percentage-based processing charges before considering any additional fees. 

Now suppose an analysis shows the company's overall payment mix could reduce its effective cost by just 0.50%. 

That represents approximately: 

$2,500 per month 

or: 

$30,000 per year 

A 1% difference would equal: 

$60,000 per year 

At $1 million per month in card volume, those amounts double. 

This is why we believe higher-volume insurance companies should periodically have their merchant statements analyzed. 

Why Newer Insurance Companies Should Look Beyond Stripe and QuickBooks 

Stripe and QuickBooks Payments have made accepting payments easy. 

For a startup, that simplicity can be useful. 

But as transaction volume grows, the question changes. 

Instead of asking: 

"Is the payment system easy to use?" 

the company should also ask: 

"What is this convenience costing us?" 

Insurance companies should review: 

• Effective processing rate 

• Debit-card volume 

• Average ticket 

• Card mix 

• Interchange qualification 

• Processor markup 

• Transaction fees 

• ACH opportunities 

• Recurring-payment volume 

• Integration requirements 

A payment provider that made sense at $10,000 per month may not make financial sense at $500,000 per month. 

Meet NPSONE: Our All-in-One Payment Platform 

Lower processing costs are useful only if the technology can support the business. 

That is why Nationwide Payment Systems offers NPSONE. 

NPSONE gives insurance companies one platform for managing: 

• Credit cards 

• Debit cards 

• ACH payments 

• Recurring payments 

• Payment links 

• Smart invoicing 

• Hosted payments 

• Customer-not-present transactions 

• API integrations 

• Webhooks 

Insurance companies can modernize their payment infrastructure without being locked into flat-rate processing. 

RESTful API for Insurance and Insure-Tech Platforms 

Modern insurance companies often need payments integrated directly into their own software. 

NPSONE includes a RESTful API that developers can use to connect payments with: 

• Insurance management platforms 

• Agency management systems 

• Customer portals 

• Mobile applications 

• Billing platforms 

• CRMs 

• Policy management systems 

• Proprietary software 

• Insure-Tech applications 

Instead of forcing customers into a separate payment environment, companies can build the payment experience directly into their existing workflow. 

Webhooks Automate the Payment Workflow 

An API lets your system send instructions to the payment platform. 

Webhooks allow NPSONE to send payment events back to your software. 

For example, when a payment is completed, a webhook can trigger your system to: 

• Mark an invoice paid 

• Update a customer's account 

• Update a policy record 

• Trigger an email or SMS 

• Update your CRM 

• Begin another workflow 

• Reconcile payment information 

That can eliminate manual processes and help insurance companies automate what happens after the customer pays. 

Smart Invoicing for Insurance Agencies 

Not every insurance agency needs to build its own payment software. 

NPSONE Smart Invoicing can provide a simpler option. 

Insurance companies can send customers secure payment requests using: 

• Email 

• SMS 

• Payment links 

• Hosted payment pages 

Customers can then pay using available payment methods such as cards or ACH. 

NPSONE can also support: 

• Recurring billing 

• Partial payments 

• Deposits 

• Scheduled payments 

• Automated payment workflows 

This gives insurance companies another way to reduce the amount of time employees spend chasing and manually processing payments. 

ACH Can Lower the Cost of Large Insurance Payments 

Cards should not be the only payment option. 

For larger insurance premiums, ACH may provide a much lower-cost payment method. 

This can be especially valuable for: 

• Commercial insurance 

• Business insurance 

• Large premium payments 

• Recurring premiums 

• Installment payments 

• B2B insurance transactions 

Offering cards and ACH through the same platform lets the business create a payment strategy instead of treating every transaction the same way. 

Stripe vs. NPSONE Interchange Pass-Through 

Stripe and QuickBooks are not bad products. 

The question is whether their pricing model still makes sense as an insurance company grows. 

One Payment Platform Instead of Multiple Systems 

Insurance companies often end up with a fragmented payment stack. 

One provider handles cards. 

Another handles ACH. 

Another sends invoices. 

Another stores recurring payments. 

Meanwhile, the CRM, accounting software and insurance-management platform all need payment information. 

NPSONE is designed to help consolidate the payment layer. 

Through our API and webhooks, payment data can connect to the systems the company already uses. 

That means the processor becomes part of your financial infrastructure instead of simply being the company taking a percentage from every transaction. 

Why Work With Nationwide Payment Systems? 

Nationwide Payment Systems has been helping businesses with payment processing since 2001. 

Our approach is different from simply quoting a rate. 

We can review: 

• Your existing merchant statements 

• Effective processing rate 

• Debit volume 

• Average transaction size 

• Monthly processing volume 

• Interchange qualification 

• Current processor markup 

• ACH opportunities 

• Recurring-payment requirements 

• API requirements 

• Existing payment workflow 

Then we can determine whether changing your pricing structure, payment technology or both could improve your operation. 

The Bottom Line 

Insurance companies should not automatically pay a flat rate simply because that was the easiest payment system to install. 

If your insurance company uses Stripe, QuickBooks Payments or another flat-rate provider, it may be worth comparing your current costs against interchange pass-through pricing. 

Certain regulated debit transactions can have interchange as low as 0.05% + $0.21, while Mastercard currently publishes qualifying insurance interchange at 1.43% + $0.05 for eligible card products. 

And moving away from flat-rate processing does not mean giving up modern technology. 

With NPSONE, Nationwide Payment Systems provides: 

• Credit and debit card processing 

• ACH 

• Smart invoicing 

• Recurring payments 

• Payment links 

• RESTful APIs 

• Webhooks 

all through one payment platform. 

Get a Free Payment Processing Analysis 

If your insurance company processes $100,000 or more per month, send Nationwide Payment Systems a recent merchant processing statement. 

We can analyze your pricing, card mix, interchange qualification and processor markup to identify potential savings. 

We can also demonstrate NPSONE and show your team how our RESTful API, webhooks, ACH and Smart Invoicing can fit into your existing payment workflow. 

Contact Nationwide Payment Systems to schedule a payment review and NPSONE demo.