Direct Debit is often avoided by small and medium-sized businesses because they think it’s too expensive and/or difficult to set up. While this may have been true in the past, things have changed.
Nowadays, it’s rather easy for Direct Debit Providers to set you up with direct debit as a payment solution regardless of your business size or annual income. Plus, the option is safe and comes with lots of benefits for your business and your customers.
So if you’re still on the fence about Direct Debit, here are some of the benefits you’ll notice as soon as you make the switch:
1. You Can Let Customers Split Large Payments Into Installments
Large invoices can put a serious financial strain on your customers’ budgets, which is why some may avoid doing business with you. On the other hand, some customers may wait to gather more money to be able to buy your product/service.
Neither of these situations is beneficial for your business, and both keep sales down and create unsatisfied customers. To avoid this grim scenario, you can use Direct Debit to allow them to pay in installments. This way, the customers get what they want, and your business has money coming in at regular time intervals.
However, make sure to do a bit of research on Direct Debit providers since not all of them can support split payments. Plus, your location may influence the available features. For instance, in Australia, you have access to a variety of direct debit solutions, so you can have your pick.
2. More Flexibility for Your Business
Do you want to run your business from your garage? Nowadays, there’s nothing stopping you!
Plus, if you choose to add Direct Debit to your payment options, you’ll be able to maintain a constant stream of cash flow. This will give you peace of mind and free your time to work on what you like instead of chasing down late-paying customers.
After all, when your customers pay late, it also impacts your own payments, which may end up affecting your reputation as a business. When the ball is in your court (with Direct Debit), things are a lot easier.
3. More Cost-Effective
The fees per payment are lower with Direct Debit than when using card payments. With cards, you pay around 3% to 5% per transaction, but most Direct Debit providers will stay around 1%. Also, the failure rate is a lot lower since the transaction isn’t intermediated by a card.
This allows you the chance to save on fees and use the money to attract more customers by offering a discount for people who use Direct Debit payments. As a result, you’ll have better cash flow, which translates into more opportunities, happier employees (who get paid on time), and a better reputation for your business.
4. Improved Security
The rate of cyberattacks on e-commerce stores and businesses all over the world has skyrocketed in the last couple of years. Attackers look for all sorts of personal data, but credit card data and bank details are some of the most valuable.
Plus, a data leak or a successful phishing/ransomware attack has the potential to damage your business’s reputation for a long time moving forward. Luckily, you can avoid all this drama with Direct Debit.
Since the customer doesn’t have to introduce their card details for every payment, and the transfer happens between banks (no intermediaries), the level of security is higher.
A Direct Debit solution is a great option for any business size as it offers peace of mind to all the parties involved. You, as a business, have reliable cash flow, and the customer doesn’t have to worry about skipping a payment by accident.
Plus, the system is far more secure than card payments, more cost-effective, and flexible.