Why your customers' payment preferences matter: A firsthand story

This guest post was written by James Tennant, Founder of Converge - a content amplification platform for B2B businesses.

Do you really know how your customers want to pay you?

You might think you do. I thought I did, but I was surprised to find out that wasn’t the case. At Converge, we’d been accepting card payments from the beginning because we just assumed that was the de-facto standard these days.

Over time, though, customers started asking for Direct Debit. Being a customer-led company, we thought it was worth finding out exactly what the demand for Direct Debit was in our user base. So we ran a survey.

More than 70% of our customers said they’d prefer to switch to Direct Debit and most of the rest said they didn’t mind either way. Great! Because Direct Debit wasn’t just something our customers wanted...

Card payments can be painful

Cards might be relatively ubiquitous today, but that doesn’t make them a problem-free payment method.

We’d had a couple of problems where customer payments had been rejected by banks and a particularly painful issue with a mistaken chargeback. So the thought of moving the bulk of our payments away from cards and towards another payment method was one we definitely welcomed.

However, there was one concern we had about the change...

Direct Debit is preferred - but isn’t it a lot of faff?

It’s fair to say we had some fairly negative preconceived notions about the Direct Debit user experience.

In our minds, we were picturing paper forms, having to deal with all the banks face-to-face, scanning forms, and way too much emailing back and forth with prospective customers. Basically, enough faff to put off any new customers from signing up ever again.

But as luck would have it, just a few days after getting those customer survey results in and thinking about how we were going to push forward with offering Direct Debit, we discovered GoCardless.

Why we chose GoCardless

It was at an event in Newcastle where we first came across GoCardless. They delivered a presentation that showed us our perceptions of Direct Debit couldn’t be further from reality.

As soon as we were back in the office, we jumped online to learn everything we could about GoCardless and how we might be able to use it at Converge.

Three things sealed the deal for us:

• It looked simple to implement

• The pricing was clear

• The customer experience looked great

The results we’ve had

Because the entire experience is a digital one - unlike what we had imagined at the start of this journey - we had GoCardless up and running within a few days.

Most of our members switched over to Direct Debit within a couple of weeks, and we haven’t looked back.

Cash flow is now far more stable. We have stable revenues every month and it’s made it far easier for us to plan ahead and be more strategic with our business.

80% of our members are now paying via Direct Debit, payment collection is easy and secure, and we’re confident we have a payments system that is robust, accessible and, something that was really key for us, future-proof.

4 things we learned

Having now switched from collecting payments by credit card to Direct Debit, we’ve certainly learned a lot. Here are our four biggest takeaways for other businesses out there:

Talk to your customers a lot - Don’t assume you know what’s best for them. There is no better way to find out how you can improve your products and services than by talking to your customers. Especially when it comes to how they pay you. Keep in contact with them, share your plans, and always ask how you can do better. They’ll tell you, and you’ll both be thankful for it.

Audit your payment systems - Are they working for you? I’ll be honest, we just assumed our payments system was the best one to use because, for the most part, it felt like it was working. We also thought a move away from it would be painful, and we doubted that we would see much improvement. It turned out we were wrong, and both our company and our customers are benefiting from the switch. 

Find a solution that scales - Whatever payment system you decide to go with must be able to scale with your ambitions. We’re a company with sights on the global B2B market, so by working with GoCardless we know we can sell our product to the US, Canadian, Australian and New Zealand markets, before looking beyond the English-speaking world too. That’s amazing. The last thing we want to do is have to use a different payment system for every country. 

Make sure the switch is going to save you time - Taking payments can be an arduous, manual, time-sucking, and frustrating task. We realised that as we scaled and we had more and more businesses joining Converge, the problems we were having with credit cards were only going to compound, so we needed to move to a system that would automate most of the work and save us time. And that’s exactly what we found. Remember, it’s as much about saving you admin headaches as it is about your customer’s improved experience. After all, the happier you are, the better service your customers will enjoy.