Claims payment disruptor Optal signs another major deal, this time with LV=
Claims payments disruptor Optal has penned its latest deal to partner up with an insurer, this time LV=.
LV= will trial Optal’s payment mechanisms for specific suppliers currently paid by cheque and who are outside of the managed supply chain.
If successful, the trial could lead to the Optal technology being expanded into the wider LV= group.
How Optal works
Optal uses a new technology called virtual account numbers (VANs) - a unique code - which suppliers and partners can receive payment over the Mastercard network.
The payments are quick and insurers don’t have to store the supplier’s sort codes thereby reducing fraud and theft risks. There is also a charge back mechanism.
The charge back mechanism means if the supplier provides faulty good or services, then the insurer is able to charge back all or part of the money paid.
An example of this would be if a vehicle has had a spray paint, but it is later found out to be done badly, the insurer can immediately get back some or all of the payment.
Optal VANs are backed by the Mastercard network.
Optal general manager Andy Downes said: “We are delighted to be working with LV= and are excited by the potential outcomes from both the trial and future uses for VANs within the company.”
Judith Coole, LV= claims operational development manager, said: “It’s been a pleasure working with Optal in developing new functionality that has the ability to transform claims payment processing.”
Optal believes the speed of system will help it provide a better service.
The one-time virtual number is sent to the supplier immediately and is presented to their acquirer less than half a day from creation, with reconciliation automatic and immediate.
This speed is essential in the motor insurance sector as sometimes suppliers will not release vehicles until they’ve been paid which can add extra inconvenience for customers, and it can also drive up costs, for example if replacement hire cars must be paid for in the meantime.