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Guide to Manual Payments

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJan 20232 min read

From data analysis to invoicing, an increasing percentage of the business cycle can now be automated. This is good news, as it frees your team to focus on the big picture rather than menial tasks. At the same time, manual processes have their time and place particularly when it comes to meeting customer preferences. This is why you still might need to use manual payment methods from time to time. Here’s a closer look at the meaning of ‘manual payments’, types, and uses.

What is the meaning of ‘manual payments’?

A manual payment method is any type of payment that involves a hands-on approach by the merchant. This could involve asking for card payment details over the phone, creating and sending an invoice by email, or taking cash payments in your store.

By contrast, automated payments are hands-off methods that don’t require any physical input from the vendor. Instead, technology operates the system within the parameters that you set. Examples of automated payment methods include things like EFTPOS, BECS direct debit, and open banking.

What is a manual payment used for?

Although they’re becoming less common as automated payment methods grow in popularity, there are still plenty of uses for the manual payment.

The first is to meet customer preferences. Some customers prefer to pay with familiar methods like cash and cheque, and they like the human interaction of a manual payment. By offering manual payments alongside more high-tech automated options, you’ll be able to serve a wider demographic. You might even increase your market share if you offer more types of payment. If your competitors only give one or two options, you’ll attract the customers who prefer to speak to you on the phone.

It's also important to remember that manual payments make sense for certain industries. For service-based businesses like hair salons, restaurants, and bars, customers often prefer to pay – and tip – in cash. This also makes sense in market settings including vintage and craft fairs, where some haggling takes place.

If your business is small enough to only work with a few B2B clients, it’s quite possible that you have no need for automated invoicing. You can simply invoice your steady clients individually and take their choice of payment.

What are the types of manual payment?

There are many types of manual payment to consider. The Reserve Bank of Australia’s triennial Consumer Payments Survey yields insight into current preferences. Its most recent report shows that although cash’s popularity is on the decline, it still represented 27% of all payments in 2019. Cheques were by far the least popular option, only taking 0.2% of the share. However, some traditional customers still might wish to use them.

Additional types of manual payment include bank transfers, which must be manually reconciled by the vendor. Card not present transactions can be taken by mail or over the phone, sometimes called MOTO (Mail Order/Telephone Order) as a result. Internet and phone banking transactions comprised 3% of payments in the Consumer Payment Survey.

What are alternatives to manual payments?

Of course, there are also plentiful benefits to automation. While it’s helpful to offer your customers a wide selection of payment options, don’t neglect the automated methods. GoCardless enables businesses to collect payments automatically on the day of your choosing using BECS Direct Debit. We’re also working on a PayTo solution for real-time payment collection. Reduce failed payments and fraud at once using the power of open banking and automation, for instant bank payments at any time of day.

While manual payments aren’t as common as in the past, there’s still room for them in addition to automated payment methods like PayTo and Direct Debit. By offering a combination of manual and automated methods, you’ll cater to customers more efficiently.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.