What are the advantages of Direct Debit?

October 20, 2020
Since its introduction in 1964, direct debits have fast become one of the most popular methods of collecting and paying bills. 73% of household payments are paid by direct debit and majority of people have multiple direct debits set up on their accounts.

A direct debit is an instruction from a customer to their bank authorising an organisation to collect an agreed amount from their account. Once set up and authorised, the direct debit system allows a business to draw payments directly from the bank account of their customer.

 

But what are the benefits of using direct debits to you as a business?

 

 

Cost

 

Bulk direct debit collections are by-far the cheapest way to collect funds, especially compared to recurring card payments.

 

 

Automation

 

As all payments through direct debit are electronically collected by your bank, once set up, you can focus on running your business without manual processes.

 

 

Error avoidance

 

Using a customers bank rather than card details means that direct debits rarely fail as these do not usually change. Coupled with evading manual process errors, direct debits provide your business with the piece of mind that you will receive your payment on time and in full. In the event that individual collections do fail, as a result of insufficient funds, closed accounts, cancelled mandate etc, you get notified by Bacs as to when and why this has happened.

 

 

Putting you in control

 

Direct debits put you in control of the regular payments enabling you to set the frequency and amounts. With the flexibility to change collection dates and amounts quickly and easily, it means companies can adapt to changing circumstances. Unlike standing orders, you have full control over what is collected, and when, subject to compliance with Scheme Rules.

 

 

Premium security and protection

 

Direct debits are controlled by built in safeguards and there are a number of security processes and verifications which have to be adhered to. As a result, it is the most secure way to pay in the UK.

 

 

Time is on your side

 

Everyone loves the gift of time and with no more wasted manually chasing payments or sending invoices, you can focus on running your business.

 

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