Phidev

B2B payments, for less – much less

Phidev is a digital marketing agency based in El Paso, Texas, specializing in providing SMB clients with content strategy and creation, marketing automation, and web design services. It also offers a website-as-a-service that simplifies websites for small businesses and tradesmen.

“As a nimble agency serving SMBs it’s important to us to keep overheads low and cashflow predictable,” said Ares Saldana, Founder and Director, Phidev. “That balance helps us to maximize time spent doing what we do best: serving clients.”

That’s why Ares took the strategic decision to migrate clients away from manual – and expensive – card payments to the cheaper, automated ACH Pull method, powered by GoCardless integrated with the Xero accounting platform.

Capped fees save hundreds per payment

The story starts when Phidev began charging clients on a monthly rather than project basis, to mitigate the impacts of slow-paying customers and increase cashflow predictability.

“At first, we did this through our credit card provider, but cards are expensive, and the integration with Xero was nonexistent, so invoicing, billing, and reconciliation was time consuming” said Ares. “The switch to a more modern card provider overcame the integration issues, but the fees were still eye-watering.”

Ares looked around for a solution and GoCardless’ capped fees caught his attention.

“The benefits are huge. Between keeping more of the money we bill and having a more stable cashflow overall, we can plan more accurately for the investments that will help us grow, such as new hires or salary increases.”

Welcomed by customers

ACH Pull is familiar to consumers and businesses in the US when it comes to repaying loans, and it’s becoming more common for B2B payments as a better value alternative to cards. This, combined with strong communication and some clever incentives means Phidev has experienced strong customer adoption.

“It’s the only option for new customers and no one questions it, and existing customers really bought into the message that lower costs for us meant lower costs for them. Our customers are businesses too, so they understand how much credit cards cost, and in the end, cheaper bills overrode any desire to earn card rewards and points. As an extra incentive for any holdouts, we also offered a 2% discount for the first year.”

Simple integration

GoCardless integrates directly with Xero, which as well as reducing admin makes the sign-up and go-live process a simple matter of a couple of clicks.

“Before the integration, reconciliation was a royal pain. Manually checking payments off against invoices and unpicking complicated card fees would take at least two to three hours every month. We don’t have any of that with GoCardless, which means more time for the team to focus on doing great digital marketing strategies and campaigns for our customers,” said Ares.

Communication is key

Having a reliable and cost-effective payments solution has also allowed Phidev to diversify its services with a new website-as-a-service offering - Lucky Little Cat.

“Simple payments is a major component of delivering on our promise of adding maximum value with minimum admin,” said Ares. “It perfectly supports the idea of a straightforward subscription that covers hosting, content updates and other maintenance.”

Ultimately, Ares attributes a large portion of Phidev’s success with GoCardless to exactly this kind of clear offering and communication.

“Open and honest communication of the benefits was vital to driving high adoption of ACH Pull,” he said. “My advice for small businesses is that, with the same approach and the right partner like GoCardless, they can also make payments predictable, cheaper and more efficient.”