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Push Payment vs. Pull Payment

Last editedMay 20222 min read

The payments landscape is constantly evolving, with businesses now able to offer a wider variety of methods than ever before. While there are plentiful ways to categorize payments, dividing them into push vs. pull payments is an easy way to start. In this guide, we’ll look at the key differences between a push payment and pull payment, so that you can determine which is better suited to your industry and client base.

Push payment vs. pull payment: definition

To better compare push vs. pull payments, let’s look at how they’re defined.

  • Push payments describe any method where the customer must take the action to initiate payment. In other words, the payer is in control, pushing the funds to a destination account.

  • Pull payments describe any method where the business can take money from the customer without approval for every single transaction. In this case, the payee is in control, pulling funds into their own account.

Push payment vs. pull payment: examples

Push payments are more frequently used for transferring one-off sums of money. Cash is perhaps the most clear-cut example of a push payment because the payer physically has money in their hand which they give to the payee. Paper checks are not quite as obvious, but they also qualify as push payments because they put the payer in control of the payment’s timing and amount. Another example of push payments are bank transfers from one account to another, like GoCardless’ Instant Bank Pay.

Here's a summary of push payment examples:

  • Cash

  • Checks

  • Single card payments

  • One-time digital wallet payments

  • Bank transfers

By contrast, direct debit mandates are a prime example of pull payments. These occur when the payer gives the payee permission to withdraw money from their account, a set-up typically preferred by businesses using a recurring payment model.

Here’s a summary of pull payment examples:

  • ACH debit or direct debit payments

  • Automated card payments

  • Automated digital wallet payments

Pros and cons of push payments

For one-time payments and everyday retail situations, push payments offer a variety of benefits.

  • They can be faster than pull payments, at least for the first time, because they give all relevant information up front.

  • They are sometimes preferred by first-time customers, who prefer to remain in control over payment with a business they’ve never interacted with before.

However, there are also disadvantages – namely for the business who doesn’t retain control over the payment. The payee is putting full trust in the payer to initiate the correct payment at the correct time. This means that payments might be missing or delayed, all of which can impact a business’s bottom line.

Pros and cons of pull payments

Pull payments also offer an array of advantages, particularly for recurring or subscription businesses.

  • They put the business in full control of payment, determining the timing and amount of funds taken.

  • They require full authorization from the payee for payment security.

On the other hand, downsides include the potential for fraud if the payer authorizes the wrong person to pull funds from their account. This might be due to phishing attacks or simple human error when entering account details. Fortunately, most payment gateways have built-in protections to prevent this.

Push vs. pull payments: the bottom line

There’s a time and a place for both push and pull payments. For single transactions, push payments are still a popular option particularly with the wealth of convenient mobile and digital wallet options available today.

Yet for subscription services or recurring payments, pull methods are almost always the better option. They don’t require continuous customer action or input. This makes it more reliable and convenient both for the payer and payee, improving cash flow and customer retention. The company retains control for greater stability and reduced payment failure rates.

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GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.

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