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What are bank payments? Everything you need to know

Emily Downer
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Last editedFeb 20242 min read

Learn everything you need to know about bank payments. Where money is sent from one bank account directly to another.

Collecting payments is at the heart of what businesses of all sizes do. 

The way you collect payments can have a real impact on the amount of cash flowing into your business, customer churn and the money you spend on collecting payments. Do it in the right way and you could make payment collection a strategic and valuable part of your business. 

What are bank payments?

Bank payments are payments made from one bank account directly to another. As funds move directly from one source to another, payments are digital, integrated, faster and more secure.

In contrast, card payments, for example, go through multiple intermediaries before actually reaching your bank account, which makes the process slow and more expensive. 

Bank payments can be used to collect instant, one-off or automated recurring payments depending on the business needs. 

Why bank payments?

Direct and digital in nature, bank payments offer a new opportunity for businesses to cut costs and create maximum efficiency. Here’s why. 

Cut payment costs

Cost per transaction

With lower and more transparent fees compared with cards and other payment methods, bank payments are on average 56% lower cost per transaction to collect. 

Cost of managing payments 

Bank payments help to automate processes by simplifying reconciliation and reducing the need to chase late payments amongst other things. Through this added automation, you reduce the overall time spent managing payments by 59%. This helps reduce the overall cost of managing payments. 

Get paid faster

Because bank payments are pulled directly from one bank account to another, businesses using bank payments can reduce their payment timings by 86%. This frees up working capital and means you get paid much faster. 

Reduce payment failure 

As a more direct payment method, bank payments only fail 2.9% of the time. Card payments, due to card expiry or loss, fail 4 times as much at 8% of the time. Payment failures mean you’ve got revenue left uncollected, and, if you’re chasing payers manually, that costs time and money and creates a negative experience for your customers. 

Reduce customer churn

Fewer failed payments mean you’re less likely to lose customers to involuntary churn. 30% of all customer churn is related to failed payments. With bank payments, the percentage of customers lost to failed payments is 4%, compared with 14% of credit card payers and 16% of digital wallet users. This can lead to a loss of revenue and even bad debt, with 10-15% of failed payments leading to bad debt. 

Leave payment inefficiencies behind

Too long businesses have suffered the high costs and resource drain of manual processes that come with cards or bank transfers. But this doesn’t need to be the case. There’s been a lot of innovation that has made bank payments a powerful option for businesses. Bank payments can help you cut costs, get paid faster, win and retain more customers and reduce the hassle of taking payments. It’s payments the way they should be. 

Bank payments, by GoCardless

We’re already working with 85,000 businesses across the globe, from start-ups to household names, to collect both recurring and one-off payments, without the chasing, stress or expensive fees. 

We combine the power of bank payments with payment intelligence tools to expand the way businesses can use bank payments, reduce payment failure and reduce fraud. 

We collect payments in 30+ countries, across 8 different local bank debit schemes

You can access all of this through one of our 350+ integrated partners including; Salesforce, Xero, Zuora and Sage. You can also integrate directly with GoCardless with our RESTful API

Bank payments are the cornerstone of the next era of payments – one that is brought to you by our deep expertise in knowing what works, what doesn’t, and how businesses of all sizes can take the pain out of payments.

“By providing simple and secure direct bank payment solutions, we’ll help businesses and their customers bypass unnecessary intermediaries and pay directly via their bank account.”

“Until now, online payments have been constrained by payment methods that were created for an offline world, resulting in high transaction costs and slow payout times,” GoCardless CEO Hiroki Takeuchi has said. “We’ve always believed that bank debit is the best way to collect recurring payments, and open banking is set to make bank payments the best way to collect one-time payments too.”

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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