Why payout options matter for settlement claims teams? 

Simply, offering choice meets claimants where they are ensuring they actually receive their settlement money.

Choose poorly and restrict options and 20-35% of your settlement goes unclaimed:  addresses are outdated so checks get lost, and unbanked claimants pay predatory fees to cash checks. Choose well and offer choice and you exceed 95% redemption rates, reduce administrative headaches and meet court deadlines.

At Talli, we offer six compliant payment methods delivered in one unified email and consolidated in one comprehensive dashboard for tracking and reporting. Each method appeals to a different claimant segment and comes with its own unique characteristics. Below, we break down exactly when to use each one, what it costs, and what problems it solves - or creates.

1. Prepaid Debit Cards

Prepaid cards are one of the most flexible and reliable forms of distribution. Through our banking partnerships , Talli can issue virtual Mastercards instantly. 

Talli generates a unique Mastercard number pushed to the claimant's phone via SMS or email. They add it to Apple Pay or Google Pay in 30 seconds and spend immediately at any merchant accepting contactless payments.

For Claimants:

• No bank account required: Serves the 14% of Americans who are underbanked and another 4-5% who are completely unbanked (FDIC)
• Instant access (virtual cards): Add to Apple Pay during coffee break, buy lunch 20 minutes later
• Universal acceptance: Works anywhere Mastercard is accepted
• Avoids check cashing fees: Unbanked claimants pay 4% fee on to cash checks at non bank stores

For Claims Teams:

• Highest redemption rates: Virtual cards exceed 95% activation within 7 days because we issue a card instantaneously 
• Real time tracking: See exactly who activated cards, who hasn't, and who's already spent funds
• Reduced admin burden: No address verification issues with virtual cards; claimants update their own contact info
• Cost: There is no cost to claims teams for issuing Virtual Prepaid Cards - a savings of $7-$12 on average compared to paper mailed checks

Best For

Virtual cards are the default choice for 80-90% of claimants in consumer class actions or mass torts. Because they are fulfilled instantly, can be used anywhere, serves everyone including the unbanked, and are credible since Mastercard is a recognized and trusted brand.  Summary: The speed and accessibility of virtual cards make them the single most effective tool for maximizing settlement redemption. 

2. ACH Direct Deposit (Bank Transfer)

Claimants provide their bank account and routing numbers through Talli's claimant journey. Funds are pushed via ACH and typically appear in their account the next day..

Pros

For Claimants:

• Familiar and trusted: Most people receive paychecks via ACH and trust the process
• Preference: ACH tends to be the preferred for larger $ payouts
• No action required after setup: Money just deposited to their bank account
• No fees: Unlike check deposits at some banks or card activation processes, Banks don’t charge fees to receive ACH transfers
• Permanent access: Once in their bank account, save or spend at your discretion 

For Claims Teams:

• Economical  ACH costs start at $0.25 per transaction, cheapest of all electronic methods
• Universally accessible: 100% U.S. bank coverage
• Large transaction support: Can disburse $500K per transaction 
• Compliance-friendly: secure and transparent reporting and easy reconciliation

Cons

For Claimants:

• Requires bank account: Excludes 18-19% of Americans who are unbanked or underbanked
• Account number reluctance: For smaller $ amounts, many people are hesitant to provide bank details to settlement portals, even secure ones
• Not instantaneous: Funds available in 1-5 day feels sluggish compared to virtual cards 
• User error: One wrong digit input re: account number will nullify payment and require a second attempt 

Best For

For larger $ payouts to claimants who already have bank accounts and prefer money deposited directly. Not suitable as the only payment method due to unbanked exclusion.

Summary: Essential to offer as an option, especially for larger $ payouts but likely won’t be your highest-redemption method. The friction of providing bank details and the delay to receive funds means most claimants will choose faster alternatives when given the choice.

3. Venmo

Venmo is synonymous with P2P payments for younger demographics. Through Talli's digital wallet integration, claimants can receive settlements directly to their Venmo balance.

Claimants link their Venmo account to Talli's application. Funds are pushed to their Venmo balance instantly and can be spent via Venmo card, transferred to bank account, or sent to others.

Pros

For Claimants:

• Instant access: Funds hit Venmo balance in seconds, available immediately
• Already using it: 76% of Americans use digital wallets; 38% have used Venmo
• Easy to set up: Linking account is simpler than providing bank routing numbers
• Social trust: For younger users Venmo provides credibility  when the settlement administrator is unknown

For Claims Teams:

• High transaction success rates: Claimants using Venmo complete the redemption process quickly and securely 
• Lower age-related friction: Millennials and Gen Z trust Venmo more than traditional banking interfaces
• Instant confirmation: Claims Teams can track Venmo transactions in real time 

Cons

For Claimants:

• Transaction limits: Venmo caps transactions at $20,000 for verified users; smaller limits for the unverified
• Account requirement: Must have Venmo account, which requires phone number and some identity verification

For Claims Teams:

• Cost: Higher than ACH; Venmo business transactions typically cost between $0.50-$1.00 per transaction depending on volume
• Limited professional adoption: Less common among older demographics (45+) who account for  substantial portions of many class actions pools

Best For

Consumer class actions with younger demographics.

Summary: Useful niche option that will delight the 30-40% of your class who already use Venmo regularly, but don't expect universal adoption. Offer it alongside cards and ACH, not as replacement.

4. PayPal

The original digital wallet. PayPal reaches a broader demographic than Venmo (including older users) and offers more robust business transaction infrastructure.

Claimants provide their PayPal email address through Talli's portal. Funds are pushed to their PayPal balance instantly and can be spent via PayPal card, transferred to bank, or used for online purchases.

Pros

For Claimants:

• Instant access: Funds available in PayPal balance immediately
• Wide demographic reach: Used by all age groups, not just younger cohorts

For Claims Teams:

• Broad acceptance: More claimants have PayPal than Venmo, especially in 40+ demographic
• Instant delivery confirmation: Know immediately when funds are received

Cons

For Claimants:

• Account requirement: Must have PayPal account with verified email
• Trust issues: Some claimants distrust PayPal or have had negative experiences with holds/disputes

For Claims Teams:

• Cost: Higher than ACH; Paypal business transactions typically cost between $0.50-$1.00 per transaction depending on volume

Best For

Settlements with claimants across all vintages or cases where a significant portion of the class already uses PayPal for business/shopping. 

Summary: More universally accepted vs. Venmo due to broader demographic reach, but cost makes it supplementary rather than primary payment method for most settlements.

5. Checks

The legacy method that refuses to die. Despite their problems, checks remain necessary for a percentage of claimants, typically an older demographic who can't or won't use digital methods.

Talli prints and mails physical checks to claimant addresses. Claimants deposit via bank, ATM, mobile deposit, or cash at check-cashing stores.

Pros

For Claimants:

• Familiar with No technology required: Works for anyone regardless of digital literacy or smartphone access
• No account linking: No need to provide bank details or set up digital wallet accounts
• Tangible proof: Physical check in hand feels more real than digital notification

For Claims Teams:

• Universal accessibility: Reaches 100% of claimants, including those without tech access
• Court familiarity: Judges understand check distribution; it's been standard for decades
• Compliance simplicity: Clear audit trail, well-understood IOLTA/QSF procedures for check issuance.

Cons

For Claimants:

• Slow: Takes 5-10 business days to arrive, plus clearing time once deposited
• Lost mail: 12% of Americans move annually (U.S. Census); checks mailed to old addresses vanish
• Expiration: Most checks expire after 90-180 days, requiring reissuance
• Unbanked fees: Check-cashing stores charge 1-10% fees (averaging 4.1%) to cash
• Looks like scam: Unexpected checks years after class action notice look suspicious; many get thrown away

For Claims Teams:

• Expensive: All-in costs run $7-$12 per check including printing, postage, reconciliation, and reissuance.
• Low redemption: 15-20% go uncashed even when received (Federal Reserve)
• Heavy admin burden to track and reconcile : Stale check tracking, reissuance requests, address updates, escheatment - all manual work
• Fraud prone: Checks are the most fraud-vulnerable payment method (63% of organizations report check fraud)

Best For

The small percentage of claimants who've explicitly rejected all digital options, lack smartphones and bank accounts, or require physical mail for accessibility reasons.

Summary: Necessary evil. Offer checks as backup for claimants who truly need them, but actively guide claimants toward faster, cheaper, more reliable digital methods first. Checks should be the last resort, not the default.

6. Gift Cards

Talli can distribute settlements via major retailer gift cards (e.g. Amazon, Target etc) for specific use cases.

Talli generates digital gift cards funded with settlement amounts. Digital gift cards deliver via email/SMS with redemption codes. 

Pros

For Claimants:

• Instant (digital): Email gift cards arrive in seconds with codes to use immediately
• No bank account needed: Works for unbanked population
• Familiar retailers: Everyone knows how to use Amazon or Target gift cards
• Feels like winning: Psychological difference between "settlement payment" and "gift card" fulfilled instantly makes redemption more appealing

For Claims Teams:

• Highest redemption rates: Gift cards often outperform for small settlements (<$50)
• Reduced escheatment: Claimants redeem gift cards quickly; fewer unclaimed funds

Cons

For Claimants:

• Limited use: Can only spend at specific retailers, not universal like cash
• Expiration issues: Many states have gift card regulations, but cards can still expire or lose value
• Perceived as less valuable: Some claimants feel gift cards are "not real money"

For Claims Teams:

• Retailer restrictions: Must negotiate approval with retailers prior to bulk gift card programs
• No flexibility: Once issued to Amazon, can't be switched to Walmart if claimant requests

Best For

Small-value consumer class actions (<$100 per claimant),. Works especially well for settlements under $100 where check/ACH costs don't make sense.

Summary: Niche tool with surprisingly high effectiveness for specific scenarios. Don't default to gift cards, but consider them strategically for low-value consumer cases where redemption rates matter more than payment flexibility.

The Talli Advantage: All Six Methods, One Platform

Talli integrates six payment methods into one unified email to meet claimants where they are. Through our partnerships and digital integrations, you can create, fund and execute branded customized payout campaigns offering claimants a choice to redeem their funds. 

The claimant journey guides claimants towards the payment option that works best for them. Real-time dashboards track payout methods , redemption rates and account for every dollar in real time. Automated reporting facilitates audit/compliance requirements including post distribution accounting.

Ready to see how offering the right payment mix increases your settlement redemption rates? Book a demo

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