Nearly all of us will be familiar with Direct Debit. It is one of the most popular methods of payment in the UK.
Direct Debits are a superb tool for businesses. They allow you to increase conversion and sales, given that Direct Debit is a familiar and trusted payment method for customers. It improves retention rates as, unlike debit or credit cards, Direct Debits don’t expire. They are simple to setup and maintain, unlike customer-controlled Standing Orders.
So why don’t more small businesses use Direct Debits? The problem is that, historically, Direct Debits have been out of reach. Two options existed: bureaus, or your bank. The former were expensive and cumbersome, with manual payment requests and limited technology. The latter were almost inevitably unlikely to help with large deposit / bond requirements and high transaction fees.
If you accept payments from your customers more than once on any sort of pattern then you are likely to benefit from Direct Debit. But how can you benefit as a small business when bureaus are behind the curve and banks not likely to help.
Once again, technology comes to the rescue. A number of disruptive providers now bring Direct Debits within reach to small businesses using technology. Simple, low and transparent fees, easy to use online dashboards and the ability to integrate directly with a wide range of software – e.g. allowing you to collect direct debit payments automatically when you issue invoices – makes these providers very attractive.
GoCardless is one of the better known providers and one we advocate strongly. Our clients will be familiar with GoCardless, given that is how we collect payments ourselves.
If you want to introduce Direct Debit into your business, we can help with design, provider selection and implementation. Just get in touch.