Bg Autogiro is a direct debit scheme for collecting krona-denominated payments from a bank account in Sweden. It's the Swedish equivalent to SEPA Direct Debit in the Eurozone and Bacs Direct Debit in the UK.
Bg Autogiro is a popular method for collecting payments in Sweden. Approximately eight out of ten Swedes use Autogiro with the average customer paying five to seven bills per month via Autogiro.
There are two key features of the Autogiro system:
Autogiro is for pull-based payments. The Autogiro system relies on a mandate between the merchant and the customer. Once a mandate has been agreed by the customer, it's the merchant who initiates the payment. The customer won't need to lift a finger.
Autogiro payments are bank-to-bank. The card networks aren't involved in the Autogiro system. All communication happens directly between the banks via the Bankgirot clearing house.
Autogiro is pull-based
With Autogiro, it's the merchant who initiates payment collection. The pull-based nature of Autogiro has considerable benefits to both the merchant and the customer:
Cash flow. Autogiro puts the merchant in control of when they get paid. This is great for business cash flow as it reduces the number of late payments.
Automation. The entire collection process can be automated with Autogiro. It reduces admin for merchants: less time needs to be spent tracking your payments. It's also great for customers: they'll no longer need to keep track of bills, the relevant due dates and possible late payment charges.
Flexibility. Autogiro allows the payment amount and frequency to be varied, keeping the merchant in control.
The pull-based nature of Autogiro also necessitates strong customer protection. Protection is provided by the Swedish Payment Services Act (2010:751).
Autogiro payments are bank-to-bank
Autogiro operates through the Bankgirot clearing scheme, rather than through the card networks.
This has significant benefits when taking payments on an ongoing basis:
Low cost. Since Autogiro payments aren't routed through expensive card networks, they're much lower cost than taking payment by card.
High retention. Churn due to card expiry is completely eliminated. Autogiro relationships last longer than ongoing card payments.
Anyone can pay. Anyone with a Swedish bank account can pay by Autogiro. This includes both businesses and consumers.
A disadvantage of using Sweden's bank-to-bank infrastructure is that Autogiro payments aren't instant.
Autogiro and SEPA Direct Debit
If your customer base spans multiple European geographies, you may have heard of the Single Euro Payments Area (SEPA).
SEPA is an EU-wide payment-integration initiative for making and receiving Euro-denominated payments. As part of SEPA, SEPA Direct Debit allows you to collect Euro-denominated from 34 countries. Our guide on SEPA Direct Debit has more information.
As Sweden is outside the Eurozone, it uses the Swedish kronor (SEK) as its currency. Autogiro is Sweden's direct debit scheme for collecting payments in kronor.
In Sweden, it's also possible to collect payments through SEPA Direct Debit (the scheme runs alongside the Autogiro scheme). However, SEPA Direct Debit can only be used to collect payments denominated in Euro (EUR). If you plan to collect payments in kronor, you should use Autogiro rather than SEPA.
GoCardless allows you to collect direct debit payments from both Autogiro and SEPA in a single integration.
Autogiro payments through GoCardless
GoCardless is an online direct debit specialist that can manage the entire collection process on your behalf. Merchants can collect and manage payments using a simple online tool or with our REST API. We offer access to Autogiro in Sweden, SEPA Direct Debit in the Eurozone, Bacs Direct Debit in the UK, and more, all in a single integration. To find out more, visit our website.