Direct Debit for telecoms and hosting companies

Direct Debit helps telecoms and hosting companies reduce failed payments and late payments and gives them the flexibility to take varying usage fees and upgrade subscriptions.

GoCardless helps hundreds of telecoms and hosting companies, from start-ups to established providers, to cut their costs by taking Direct Debit payments online. They usually choose Direct Debit for three reasons:

  • Enable customers to upgrade their subscription easily
  • Reduce failed payments and churn
  • Cut down late payments

1. Direct Debit enables customers to upgrade their subscription easily

Your customers may want to upgrade or downgrade their subscription. Equally, their usage and charges may vary each month. If they pay by standing order or bank transfer, the customer will need to change the amount of their payment themselves. With Direct Debit, your customers don’t need to do anything: you have full control over how much you take from them, and when. 

Adam Howard-Dobson, Services Director at VoIP provider Zen Systems, switched to Direct Debit with GoCardless looking for:

“A flexible but reliable way of collecting invoices for customers’ varying usage fees. We now require that all VoIP customers sign up with GoCardless.”

2. Direct Debit reduces failed payments and churn

The easier you make it for your customers the more likely they are to keep paying for your service. Using Direct Debit helps make your payment process as easy as possible. It allows customers to set up then forget about their payments instead of having to remember to pay you each month. 

Many telecoms or hosting companies use card to take payments. Roughly 5-10% of these fail each month due to cards expiring or being cancelled. This is a bad experience for your customers, creates unnecessary work for them having to update their details and worst of all, if they forget, may result in their subscription lapsing. By contrast, Direct Debit payments use a customer’s bank details, which rarely expire or change.

3. Direct Debit helps you avoid late payments

Direct Debit puts you in control of when you’re paid. Once you have authorisation from your customer, you can collect payments whenever they’re due. This means you can make sure all your customers pay on time without awkward conversations about stopping their service. 

Before turning to GoCardless, Zen Systems struggled with customers paying up to 3 months late.

Adam explained, “When you start getting large volumes of customers, there is an associated cost of sale with those services. With customers paying so late, it was hard to take control of the business. Now that we use GoCardless, everyone pays on time.”

How to get started with Direct Debit

You can get access to the Direct Debit system via a bank, a bureau or GoCardless. If you would like to find out more about any of these options you may find our 60 second guide to Direct Debit providers helpful. 

GoCardless is the UK’s leading Direct Debit payments provider. It lets you automate the whole payment process and manage everything online. It offers:

  • Quick and easy sign up. You can sign up instantly and for free.
  • Easy and efficient management. You can collect recurring and one-off payments automatically, or at the click of a button. We manage everything else for you. We are also integrated with many of the most popular accounting packages to enable easy invoicing and payment reconciliation.
  • Simple, low pricing. All it costs is 1% per transaction, capped at £2. Scale pricing is also available. Many telecoms and hosting companies also choose GoCardless due to the absence of set-up costs and fixed monthly fees.
  • Simple online dashboard and REST API.Some Direct Debit Bureaus provide an API which you can plug into. GoCardless offers a simple online dashboard and REST API, which allow you to integrate GoCardless with your website and CRM. 

For more information on the Direct Debit system, read our overview of how Direct Debit works. You can also watch a short video on how GoCardless allows you to save time and money when collecting payments using Direct Debit.

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