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How to maximise Direct Debit uptake

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Last editedJul 20233 min read

You already offer Direct Debit as a payment option, and you’ve seen the benefits it brings to your business. From automation and flexibility to low transaction costs and low failure rates, the benefits of Direct Debit have even more impact when more customers are using it. So, how can you encourage more of your customers to pay by Direct Debit?

The fact is, Direct Debit doesn’t just benefit your business, it brings a whole host of benefits to your customers too - benefits that add to the value and quality of service you’re already delivering.

We work with thousands of GoCardless customers every year to help them increase Direct Debit uptake among their customer base. Here are some of the tactics that work best.

1. Offer an incentive

Using Direct Debit brings plenty of time, admin and cost savings to your business. Passing these savings on to the customer, by means of incentives and discounts, can be another way to make it an even more attractive proposition to your end user.

Incentives can be products, services, or discounts relevant to your customer base for example:

  • The National Trust give a free pair of binoculars to people who pay by Direct Debit.

  • Some energy providers, including EDF offer a percentage (usually around 7%) off your bill.

  • The Tate

  • Norwich Residential Management (NRM) encourage their residents to pay service charges by Direct Debit in an instalment plan, rather than by cheque or Bacs payment - if they do, NRM waive the £25 payment administration fee.

2. Sell the dream!

Many of our merchants have found that using Direct Debit makes their customers’ lives easier. Iain Worthington, VIA’s Finance Director, says: “Even those merchants who were reluctant to move to Direct Debit at first realise that it has made their lives easier. In the majority of cases, Direct Debit benefits both us and our customers.”

Ensure you get the benefits of paying by Direct Debit across to your customers. For example, explain that they will need to set up Direct Debit just once, and then won’t need to worry about actioning the payment again, (unlike if their card expires, for example), saving them time and hassle in the future. Direct Debit can also help customers budget more effectively because they know exactly how much they will be paying and when.

3. Be honest

In some instances it helps to be honest with your customers and say how them paying by Direct Debit will help your business. For example, for smaller business or social clubs where there is a closer relationship between the customer and the merchant, explaining that Direct Debit will help your business run more efficiently, keep costs down and save time, is often enough to get customers on board.

Some larger organisations, where the customer has an invested interest in the efficiency of the merchant, also take this route. Harrow Council for example, communicate on their website that Direct Debit keeps their costs down which will, in turn, help to keep council tax down.

4. Offer peace of mind

Make sure to highlight the fact that Direct Debit is one of the safest and most secure payment methods available. All transactions are covered by the Direct Debit Guarantee. This means customers can request an immediate refund of any Direct Debit payment taken from their account in error, simply by calling their bank and asking for it.

Showing customers that they have complete cover for payments made in error or taken fraudulently, emphasises that the guarantee makes Direct Debit by far the safest payment method for UK consumers to use.

5. Put Direct Debit first

If you prefer customers to pay by Direct Debit, make it the first option on your website’s payment page. This will give Direct Debit precedence over any other payment methods listed on the page and get the attention of the customer.

We sometimes see merchants who prefer Direct Debit, remove other payment options altogether. Others offer alternatives to maintain flexibility for their customers, but introduce a barrier, such as sign up by phone only, not online, as a way to nudge customers towards Direct Debit.

6. Give your customers flexibility with GoCardless

GoCardless offers your customers a wider range of sign up options. They can sign up online, using a paper mandate form, or over the phone. Other payment options don’t usually offer so much flexibility and convenience.

When migrating existing customers over to Direct Debit, we recommend emailing them a link to the online mandate form two or three times (including one or two reminders). The following month, your team can call to remind those customers that haven’t yet actioned your email.

Interested in collecting Direct Debit?

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Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

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