The BECS Direct Debit system in Australia has two core features, around which most of the system revolves:
- It offers pull-based payments: Once a customer completes a Direct Debit request, the merchant can then initiate Direct Debit payments without any further action needed from the customer.
- Payments are bank-to-bank: Direct Debit doesn’t involve any card networks. Instead, the banks communicate with each other directly via the Bulk Electronic Clearing System (BECS).
Direct Debit is pull-based
When using BECS Direct Debit, you, as the merchant, will initiate payment collection from your customer, known as the pull based approach. This offers considerable benefits, including:
- Cash flow control: Direct Debit gives you control over when you get paid. It can also reduce the number of late payments.
- Convenient automation: The entire collection process can be automated, reducing admin for both the merchant and their customer.
- Increased flexibility: Direct Debit allows the merchant to vary payment amounts and frequencies.
Because of the pull based nature of Direct Debit, strong customer protection is necessary, which is provided under the BECS scheme rules.
Direct Debit payments are bank-to-bank
BECS Direct Debit operates through the BECS clearing scheme, instead of via the card networks. This provides significant benefits when taking payments on an ongoing basis, such as:
- Lower costs: Direct Debit payments are very cheap, because they don’t need to be routed through Australia's expensive card networks.
- Higher retention: With Direct Debit, involuntary customer churn through card expiry isn't a problem, meaning customers stay with your service for longer.
- Open to everyone: Anyone with an Australian bank account can use Direct Debit to make payments.
Direct Debit payments through GoCardless
GoCardless is an international specialist in online bank-to-bank payments. Our service handles the entire payment collection process on your behalf. You can choose to collect and manage customer payments in a variety of ways: either by using the simple GoCardless online dashboard, through one of our pre-built integrations with popular accounting and billing software, or by creating your own integration using our REST API.
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