Nobody likes waiting in long queues every time they need to make a payment for a utility bill, right? Also, tiresome invoicing could mean great financial losses for a business and its customers due to the time wasted carrying out the task. The answer to this is direct debit payment. Direct debit refers to a transaction that takes place when a person authorizes their bank to debit their account and credit another company’s account as a form of payment on a regular basis. It is also known as pre-authorized payment or pre-authorized debit. Hence, the payee’s business gets money directly from a checking account and then forwards a receipt to the payer. The payee can access the money via the internet, recurring billing or mobile phone. Businesses can accrue many benefits from this form of payment which is why it is very popular in the UK today.
For one, businesses will be in a position to offer world class customer services to its customers. The business will achieve this by offering customer friendly services such as timely clearing, re-presentation and a report on the completed transactions. These will foster better customer relations and promote customer loyalty. The company also avoids wasting time writing invoices and collecting payments. Hence, it can spend time wisely doing more constructive activities. By using direct debit, a business will also avoid duplicate data entry as well as making uncountable trips to the bank. The services also enable a business to be more efficient by avoiding making errors. Direct debit payments are also convenient for the business as the software is easy and simple to use.
Direct debit is most suitable for companies that receive payments regularly. These include clubs, charitable organizations, and real estate and property management companies. These companies require collecting subscription, membership fees, donations, contributions, rents and insurance fees in regular intervals. Schools and educational institutions may also make use of this method of payments when collecting tuition and subscription fees.
A business can decide on the best direct debit system to follow among the three available options in the market. These include using the GoCardless services, bank or the direct debit bureau. Large companies may opt for a direct access which involves handling the direct debit internally. This method has the least transaction fees as compared to others. However, your business will have to invest heavily in terms of manpower because it takes about three staffs to handle the tasks involved. If your company is not willing to submit directly through a bank, then all is not lost. Your business may also decide to outsource the task to a third party such as a direct debit bureau or a GoCardless. Overall, the outsourcing the work to a direct debit service provider like Eazipay is cheaper than submitting directly.