A payment transaction, in its simplest form, has three main participants: account holder, merchant/provider, and card processor. The account holder pays the merchant for goods and services rendered, and the card processor ensures that the merchant receives payment. Other parties are merely brokers in the process. When considering an account-linked payment card for employer benefits, TPAs must find a solution that provides improved security, accountability, and flexibility for all parties involved in the transaction.
The rise of consumer directed healthcare (CDH) during the past decade has led many employers to seek new methods to incent plan enrollment and enable employees to access their funds. Today one of the ‘must-have’ perks for most employer-sponsored benefits packages is an account-linked debit card. While the debit card makes it much easier for the account holder to use available moneys, the journey that a payment takes from card processor to merchant or medical provider can be inundated with complications and delays. Third party administrators (TPAs) manage the supporting documentation and administer their clients’ accounts, but typically outsource the financial obligations to a payment solutions company. Often, the payment solutions company is just a program manager who turns around and hires a card processor to actually fulfill the payments.
This tangled web of commercial handoffs makes the entire payment process problematic, especially when there is a breakdown in the system; identifying the underlying issue and providing accountability can lead to frustration all-around. Utilizing a single payment solution company that oversees the process from beginning to end offers increased support, greater accountability, and enhanced security.