Last editedJul 20234 min read
Direct Debit is an excellent payment collection option for any business that needs to automate payment collection, eliminate late payments and save time and money on the payment process. Despite there being several options when choosing a provider, GoCardless offers plenty of features that extend the benefits of Direct Debit for our merchants.
GoCardless at a glance
GoCardless makes it simple to get started with Direct Debit. With no contract or upfront commitment required, you can try GoCardless risk-free.
Set up payments quickly and easily in the user-friendly online merchant dashboard with just a few clicks. You can be up and running and accepting payments on the same day.
Get started with no sign up costs, no commitments and no hidden fees. See pricing.
Get paid on time
With GoCardless, you can significantly reduce late and failed payments and automate tedious financial admin, saving you time, money and stress.
GoCardless Direct Debit is more secure and convenient for your customers, so they’ll prefer it too.
1) Direct Debit payments collected on time
It's quick and easy to collect payments on time, every time, with Direct Debit via GoCardless.
You can set up an account with GoCardless for free without a contract or any up-front commitment. Through the easy-to-use merchant dashboard, it's fast and straightforward to set up payments meaning you can be up and running in minutes.
How to collect Direct Debit payments with GoCardless
Create your free GoCardless account, access your user-friendly payments dashboard & connect your accounting software (if you use one).
Easily set up & schedule Direct Debit payments via payment pages on your website checkout or secure payment links.
From now on you'll get paid on time, every time, as GoCardless automatically collects payment on the scheduled date. Simple.
Inside the dashboard, you can schedule payment collection for the required amounts and dates. GoCardless will send the relevant authorisation forms to your customer. Once authorised, those payments are regularly pulled from your customer's bank account on the due dates you set without any further action from you or your customer.
2) Say goodbye to late payments
With payment collection automated, there's no more chasing late payments.
Surveys show three in five UK businesses are owed money from late payments, fuelling stress and cash flow problems. GoCardless provides a solution for this issue by eliminating late payments almost entirely.
Direct Debit is a 'pull' payment, which are controlled by the payee. In contrast, manual bank transfers, often used to settle invoices, are 'push' payments controlled by the payer. Customer authorisation is only required once to enable recurring payments to be debited from the customer and credited to your business.
With GoCardless, you can schedule the payment and notify your customer using the merchant dashboard in just a few clicks. Once your customer has approved the mandate, no further action is required. The funds will be pulled automatically from the customer's account on the scheduled date, meaning you get paid on time every time.
3) Save time chasing late payments
No more time wasted chasing late payments
While the core issue of late payments causes cashflow concerns for small businesses, that is not the only problem businesses-owners face due to late payments.
Late payments also inflict a significant time cost on SMEs. Research studies highlight that the average UK SME spends 30 hours a month chasing these late payments.
However, thanks to automated on-time payment collection, GoCardless merchants only need to spend 2.6 hours each month dealing with late or failed payments - that works out as 90% less time than the average business spends chasing late payments.
4) Cheaper than card payments
GoCardless merchants enjoy low transaction fees
Credit card transaction fees can be over 3x more expensive than GoCardless.
On average, credit card fees range between 1.5% and 3%, but how much you'll pay will depend on your card network and specific fee structure.
Not only is GoCardless cheaper, but we also provide pricing transparency.
Accepting a £500 payment by credit or debit card will cost a merchant between £7.50 and £15.
However, with GoCardless that same transaction costs just £4.
5) Higher success rate than cards
High success, low failure rate
One of the significant issues for businesses that accept recurring card payments is the relatively high payment failure rate. Card payments fail at a rate of around 10 - 15%, and the main reasons for these failures are lost, cancelled, and expired cards.
In contrast, Direct Debit is an account-to-account payment. As a result, because bank accounts cannot be lost or expire, Direct Debit via GoCardless enjoys a payment success rate of 97.3% on the first try and up to 99.5% with the 'intelligent retry' technology of Success+.
6) Spend less time on financial admin
Save time on manual payments admin
Payments admin such as raising and sending invoices, bank reconciliation, and credit control are time-consuming and expensive for businesses.
A recent YouGov survey found that small businesses spend over 12 hours a month on regular payments admin, such as invoicing, accounting, expenses, budgeting, and forecasting.
However, businesses using GoCardless can automate payment collection, reconciliation, and other tasks, spending 59% less time than the average business managing payment admin.
7) Free to get started, easy to set up payments
Super-simple to start using GoCardless
With no upfront commitment and no requirements for contracts to start using GoCardless, there is no risk in trying it out. The merchant dashboard is easy-to-use and makes it super simple to set up payments with a few clicks.
You can take advantage of our pay-as-you-go pricing to create your account and start onboarding customers today. Click here to get started.
Direct Debit case study
GrowFactor, an award-winning digital chartered accountancy practice, moved from card payments to bank payments via GoCardless, resulting in substantial improvements in cash flow and payment efficiency. The shift to GoCardless has saved the company plenty of time and money and continues to do so, Simon Kallu, a Managing Partner, said,
The firm faced issues with time-consuming manual administration and difficulties collecting late client payments. They also struggled with standing orders that could not be integrated efficiently into their cloud-based accounting workflow. GoCardless helped resolve these challenges, automating invoice dispatch and payment collection, eliminating the need to chase late payments. Simon is now less stressed about collecting payments,
The integration of GoCardless with Xero, a popular cloud-based accounting software, was simple and quick. It offered GrowFactor automatic reconciliation and allowed customers to sign up online within minutes from any device. Simon notes
GoCardless has also been a hit with GrowFactor's clients, says Simon,