Applied Systems: How bringing payments in-house simplified admin for their users

We decided to get into payments for two reasons. First, we felt it would solve a lot of problems for our customers. Second, there was a clear "better together" story. Our management system was already keeping track of how much agents should get paid and how to disperse money to various parties. So we thought, rather than just keeping track of it, why don't we actually help them move that money and then automate all the record-keeping associated with it.

In insurance, there's approximately $1 trillion of money movement per year. Keeping track of it all is crucial, and 50% of that $1 trillion was paid through physical checks, which seems absurd in this day and age.

By collecting the payment digitally, you could automatically trigger the record keeping and eliminate a lot of manual effort. We have customers that have dozens of people who just count money. That's a huge problem for us to solve, especially when we're selling them a core system that's keeping track of their revenue and how much money they owe.

Graham Blackwell: If you talk to people in the finance department of insurance companies who are trying to collect and route that money, they have enormous pain.

I think that's what we had to discover, that depending on the company, they might not understand the art of the possible. We have a big customer who said, "We don't accept credit card payments." When we asked why, they said, "We don't really understand it. We don't want to get fined. We don't know what the local rules are.” That's another example of a pain point. In our case, you're limiting how an insured individual can pay for their insurance policy. That's a problem. 

So we can say to our customers, "Hey, can we help you with that? We can help you manage all those rules and regulations by working with folks like Adyen." And they go, "Oh wow. If you guys can handle all that, we'd love to be able to accept credit cards because our customers are asking for it."

Graham Blackwell:  It was daunting. Luckily, there's now an established market of providers like Adyen that operate in this space. We found it helpful to get some external consulting help to run the RFP process. It was very different from a normal procurement process where you're just trying to play different vendors off each other. It was much more about understanding what to look for and who really understands these local markets.

We found there's differentiation in technology, like how you integrate with different partners. But there's also differentiation in how the various players are willing to work with customers. Some are very much, "Hey, choose your own adventure. Here's the API, please don't call me." Others, like Adyen, have much more of an account management approach. For us, we needed the latter because it was going to be a large investment for us. As we've gotten into it, embedding payments into our products in the right way requires a lot more back and forth than we expected. So the account management piece and collaboration is super, super important.

Graham Blackwell: In the long term, we're absolutely thinking about embedded finance like business accounts.  We feel very fortunate that Applied Pay has been one of the fastest-growing products. There's tons of opportunity for us focusing on that collection and financial automation associated with it.

In the very near term, we're going to be expanding our payments offering to include premium finance. Premium is just the insurance premium, but think of it as equivalent to a buy-now-pay-later option in other industries. We'll be embedding that in the checkout page so our customers can provide a flexible payment method to their users.

You mentioned card issuance. Insurance carriers have done a really good job with this. For example, if you get in an auto accident and file a claim saying, "Hey, Progressive Insurance, you owe me $5,000 to repair my car," some payment companies have worked with carriers to issue a credit card for $5,000 instead of mailing a check. It's a better experience, they can control spending limits, and track expenses. We don't serve carriers as much as agencies, so we haven't done this.

Graham Blackwell: I would say you should absolutely take a look at it if you haven't already. That would be the starting point. For most categories, especially if you're some sort of core system for your customers - whether that's their CRM, accounting platform, or other variants - I think it's worth considering. Even if you're not a mission-critical system today but you're looking to expand into different modules that will drive stickiness, you should think about this.

My advice would be to try to find some expertise out there that's dabbled in it before. You'll likely feel intimidated getting started if you don't have an expert in your ear. 

So that'd be my advice: take a really hard look at it, figure out how it's synergistic with the rest of your products, and go find those experts out there who can help. There are people with the knowledge you need, so seek them out.

By integrating embedded payments, Applied Systems has solved critical customer pain points, unlocked new growth opportunities, and deepened its market position. The message is clear: whether you're looking to streamline operations, enhance customer experience, or drive new revenue streams, embedded payments and finance offer a powerful path forward.