Virtual Payments: The Cure For What Ails Healthcare Providers And Other Industries
It’s a process that most employees and some employers rarely think about, but payroll processing is an expensive, often cumbersome task than can cost businesses big money if done in an inefficient manner.
WEX is one company working towards solving those payroll problems, and PYMNTS.com spoke with Melissa Smith, president of the Americas, and Jim Pratt, vice president of corporate payment solutions, to discuss the advantages of moving away from traditional paper checks.
According to Smith, payroll prepaid card usage has grown about 34 percent since 2009 in the U.S. – a change Smith believes is partially due to the current regulatory environment in many industries.
“In just round dollars, each paper check costs about $2. So versus loading a payroll card, which costs about 20 cents, each check will be saved $180, roughly. What that results in is savings to the employer, and at the same time, it’s providing access to lower cost payments verses a paper check for underbanked employees,” Smith said.
“When you multiply that out times the type of businesses we’re servicing … there are significant dollar savings.”
Smith also noted that prepaid payroll cards are advantageous not only to employers, but to employees as well. Products such as WEX’s Rapid Pay Card provide unbanked and underbanked employees with a simple way to access their income, and have value-added features such as electronic access to W-2s as well.
“It’s a win-win both for the employer and for the employee,” Smith said.
One industry in which streamlining the payroll process can be especially beneficial is the healthcare sector. As Pratt noted, medical billing is one of, if not the most, complex billing and payments industries, and has a tremendous amount to gain from an efficient payments process.
“It’s no secret that there’s been significant focus on the healthcare industry over the past several years. In fact, the Affordable Care Act – the Obama Act, if you will – targets in particular a number of areas where both the payers – the insurance companies – as well as the payees – the medical providers around the country – are mandated to move both claims and payments to electronic means,” Pratt explained.
“One of the studies that I looked at said that potentially 30 percent of all the costs of healthcare in America are administrative costs, so clearly, [there are] significant savings for everybody in the system. And that’s money that can go towards care if we can wring some of those inefficiencies out of the system.”
To hear more Smith and Pratt on payroll alternatives, the healthcare industry and underbanked employees, listen to the full podcast below.
*If you have trouble with the audio player above, click here.
To read a transcript of the audio conversation, click here.
Melissa D. Smith
President, The Americas, WEX
Melissa D. Smith has served as our President, The Americas since January 2012. Before that, she served as President, North America from April 2011 until December 2011. Prior to that, she served as Chief Financial Officer and Executive Vice President, Finance and Operations since November 2007. From September 2001 until November 2007, she was our Senior Vice President, Finance and Chief Financial Officer and from April 1999 to August 2001, she served as our Vice President and Controller. From May 1997 to August 2001, Ms. Smith served us in various financial positions. From August 1991 to April 1997, Ms. Smith held various positions as a senior auditor and manager in the Portland, Maine office of Ernst & Young LLP, which was acquired by Baker, Newman & Noyes LLC, a Portland accounting firm. Ms. Smith has over fifteen years of experience in finance, auditing and accounting positions. Ms. Smith is also the chairperson of the Board of Directors of WEX Financial Services Corporation.
Vice President, Corporate Payment Solutions, WEX
Jim Pratt has worked for WEX since 1998 and has been Vice President, Corporate Payment Solutions since 2007. In this capacity he is responsible for identifying new opportunities and working to build market share for the WEX Universal Card and MasterCard areas, in which he has a highly successful track record.
From 2006 to 2007 Jim was Vice President, General Manager of MasterCard business for WEX and from 2000 to 2005 he was Director of the company’s MasterCard Line of Business. From 1998 to 2000 he sold CoBrand fleet programs for WEX as Director of Relationship Management.
Prior to joining WEX Jim spent 10 years With Digital Equipment Corporation in various sales and management positions. From 1996 to 1998 he worked as a consultant for 3Com. His got his career start selling radio and television advertising.
Jim grew up on Long Island, New York. He has a BA degree from Bates College in Lewiston, Maine and has completed graduate courses at the University of Southern Maine.
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