Why We Invested: Aya Payments

It’s remarkable that, in 2020, many financial services companies still operate manual — often paper-based — processes. A company might be forgiven for those processes that are purely internal — corporate duct tape that’ll do until someone finds some spare time to find a better solution. The worst of these manual processes? Anything customer-facing. Who hasn’t gone crazy after finding out that they have to print a form, complete it (in black ink, of course) with block capitals only [take a breath] then sign and… scan it in?

Compounding the problem — and testing every last bit of faith you might have in humanity — is that we’re often faced with these processes at critical moments when we just need things to work. Even more anxiety-inducing are those occasions when it’s something truly important, like healthcare.

This year, we were excited to be introduced to the team at Aya Payments, who shared their compelling vision for the future of payments in the healthcare industry. The Aya team is building a payments platform to create a variety of healthcare payments products, including credit cards, disability accounts, health savings accounts and wellness accounts.

What are HSAs and WSAs?

Aya’s initial product is a prepaid MasterCard product for the Health Spending Account (‘HSA’). An HSA is a tax-advantaged health benefits program that an employer can offer to its employees to supplement or replace a traditional health benefits plan (like vision, dental, paramedical such as physical therapy, etc.) in Canada and the United States.

Under a traditional program, employers pay a monthly premium for employee benefits, regardless of whether the employee uses those benefits. When using those benefits, typically the employee must pay for services up front out of pocket and then submit claims for reimbursement, which can often take several days or weeks to process.

The primary advantage of an HSA is to keep the cost of health benefits fair and transparent to employers. Until recently, HSAs have been used to supplement traditional employee benefits plans, but more and more employers are replacing traditional benefits plans in favour of HSAs.

Similar to HSAs, Wellness Spending Accounts (‘WSAs’) are employer-provided wellness schemes that give employees an allowance to spend on wellness-related activities and products. As with HSAs, employers have control of the spending and employees have full flexibility as to where to spend the funds. Examples of what this money can be spent on include gym memberships or fitness classes, therapy, counselling or a new pair of running shoes.

Removing time, effort, and cost from healthcare benefits processes

In their current form, most HSA programs offered by incumbent insurance carriers still require employees to pay out-of-pocket and submit a reimbursement claim. However, the modern HSA should remove time, effort, and cost from the health benefits process (for both the employer and the employee) as compared to traditional benefits plans. Aya’s technology is working to address three key pain points in healthcare payments:

• Fraudulent claims frequently go unnoticed, as current providers currently only review a fraction of the total claims made. This can lead to major financial losses for those firms that unknowingly reimburse these fraudulent claims. It is estimated that fraudulent claims can amount to over $130bn annually, across Canada and the United States.
• The end user (meaning: you or me) must manually enter various pieces of information about each service provider (like name, phone number, address, provider registration number, etc.) every time a new claim is submitted. This process is long, tedious and ultimately unsatisfactory.
• Claim reimbursement can take anywhere between 2 to 30 days, assuming no input errors — in which case, the process can take even longer — and creates a financial burden for the employee (especially with larger, medical-related claims). Given the amounts of information that must be entered manually, the process can be fraught with human errors, which only leads to even more frustration!

The COVID-19 pandemic has shocked financial services companies into rethinking how they prioritise digitisation. An increased demand for digital tools and an ability to complete tasks online is already evident; Legal & General saw a 72 per cent increase in customers using digital channels during the pandemic, with more than one million more customers going online. Visa saw more than 13 million people in Latin America make their first-ever online transaction earlier this year.

As all of these trends (and more) accelerate across financial services, we’re looking forward to Aya’s team playing a role in transforming the healthcare payments landscape in Canada, and beyond. Of course, we’re also excited about our first time working with the great teams at Luge Capital and MaRS!

If you’re interested in working with Chanddeep, Mario and Joanna, take a look at open roles here.