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Solutions for managing direct debit payments

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Last editedMar 20233 min read

Collecting payments is one of the most fundamentally important aspects of a business and ensuring that process is safe and reliable means that much more in a landscape late payments are costing small businesses as much as $1.1 billion per year.

Unpaid invoices and late payments are a blight on small businesses and the best way to mitigate the problem is to set up a thorough direct debit management solution. This will ensure payments are being made directly and automatically with minimal fuss and the best solutions can be through an open API that allows all payments to be integrated into the system.

Whether you’re collecting one-off payments or recurring payments for rent, instalments or on a subscription model, having direct control of how and how often you get paid can be a game-changer for many businesses.

What is meant by direct debit management?

Direct debit by definition is a process that allows businesses and individuals to collect payments directly from a customer’s bank account and is one of the safest, fastest, and most convenient ways to collect payments, particularly if you’re collecting recurring payments.

Managing your direct debit payments with a bespoke system designed for that specific purpose means a more predictable cash flow, faster payments, saved time and potentially increased sales, as direct debit also allows customers to pay in smaller, automated instalments.

Considerations for managing direct debit payments 

There are several reasons to take direct debit payments. The most obvious pain point it will help overcome is late payments, as the entire process is automated to draw money directly from a customer’s bank account on the same date every set period. It also frees up employees from tedious admin tasks, particularly given the relatively minimal failure rate of direct debit compared with credit and debit payments (which is above 5%). The failure rate at GoCardless for direct debit payments, meanwhile, is just 2.2%.

Direct debit payment management for charities, gyms, rental businesses and more makes it not only safer for you and your customers but offers greater transparency and flexibility. For example, if a donator had fallen on hard times and wanted to reduce the amount they paid to your charitable organisation every month, you can easily change the fees, date and/or frequency of payments.

The top 5 direct debit management solutions? 

1. ZenPlanner

Designed from the ground up for gyms and other fitness studios that charge regular subscription fees, ZenPlanner boasts flexible payment processing and even marketing tools to promote the latest events and deals to existing members. Recurring subscription billing is included as standard, and it also features a dedicated customer portal that can be used to book classes remotely and sync all member activity with the billing cycle. It is, however, a costly product that might not make sense for other businesses besides gyms.

2. GoCardless

Our direct debit management solution integrates seamlessly with over 200 partners, including accounting software giant Xero. This means you should be able to fit the process into your existing system with minimal effort. There are also no contract or set-up fees to consider so is the ideal option for a smaller business dipping its toes in the direct debit waters for the first time.

3. Stripe

While it might be one of the oldest solutions on this list Stripe is still a highly flexible platform that not only manages direct debit payments but card payments too. However, it's a platform designed by developers, for developers, so there’s a rather steep learning curve and if you want to make the most of it, you’ll probably need a dedicated professional.

4. Nation Builder

If you’re looking to grow your user base via social media, then Nation Builder is a powerful tool with a straightforward monthly fee. It is, however, quite limited as far as payment processing is concerned.

5. Smarter Pay

An end-to-end solution for the creation, management and processing of direct debit, Smarter Pay offers a range of features that make it a strong competitor such as automated alerts and the ability to use it as a cloud-based or on-premises solution. It is, however, a solution that might prove too costly and complicated for smaller businesses.

Direct debit Management example - Gym Membership Direct Debit Management

To underline how direct debit management works on a granular level, let’s use the example of gym membership direct debit management solutions. Unless your gym is part of a larger franchise, it’s likely to be a small business with only a handful of regular employees. It’s also a business that will rely on regular subscription payments.

Traditionally, a gym would have needed a complex filing system but today, software can automate many backroom functions such as recording member contact details and collecting monthly payments. This makes the entire membership feel more cohesive, direct, and flexible for both parties.

How can GoCardless help?

GoCardless has helped thousands of businesses of all shapes and sizes across the world get paid on time, every time. With GC, all payments are made bank-to-bank, which means they are cheaper and more reliable.

You can also take fixed, variable and add-on payments, which gives it the flexibility to work with even the smallest businesses. It’s easy to integrate into your existing accounting software too and has links to PayTo, Australia’s latest and greatest payments platform innovation.

GoCardless streamlines payment systems, reducing friction and pain points for one-off and recurring payments alike.

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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