Direct debit companies provide a payment service in which the owner of a bank account tells his bank to transfer a agreed amount of money at a certain time and frequency to another bank account. Direct debit is a very popular payment method used in most countries around the world due to a number of significant benefits, with security being a key driver for its adoption. Its main goal is to automate recurring billing so that they can be paid more efficiently and conveniently without the need to manually charge customers each time a transaction needs to be initiated. Prior to setting up a direct debit, both parties need to agree to the billing cycle and cost and give financial institutions the approval to debit a customers account.
More specifically, permission is usually obtained by the company to facilitate payment from its customers, which is then sent to the bank for processing to permit the debit of the account. Details regarding payment confirmation will include the amount, customers signature, date, and frequency of debiting the account. A direct debit can also be set up over the phone using a formal script to collect information, as well as via an online application form.
Benefits of direct debit solutions
This is a very popular payment method, because it is simple, secure and very reliable. Direct debit isn’t just suitable for businesses, individuals can also use it to provide instructions to the bank about transferring amounts from one account to another, depending on their specific needs or when paying a credit card or other accounts. Direct debit for small business saves time and money, whilst also making cash flow management simpler and more organised. Other benefits of direct debit include;
- Using the direct debit system for the regular transfer of amounts from one account to another, a person can correctly plan the flow of money so that any expected deficiencies can be eliminated promptly.
- A person or company that must make regular payments cannot remember the time of payment and may not be able to pay. After the introduction of direct debit, payments will be made on time, and there will be no risk of fines or an increase in interest due to late payments. This saves a lot of time and energy because a person does not need to forget to take a vacation to pay. For companies, the web agency sets up the system on behalf of its customers.
- The system is safe because payments come from the bank, and therefore no other online methods responsible for computer crimes should be used. There will be no chance of hacking payment portals and redirecting funds. Also, the risk of obtaining credit card information in the wrong hands will be eliminated.
- Direct debit allows you to reduce the cost of debt collections and minimizes the bank charges direct debit helps you get more predictable cash flow and helps you not only build a better and loyal customer base, but direct debit has a lower fraud rate than other payment methods.
- The fact that the bank makes periodic payments means that the debtor should not remember his payment unless there are funds in the account. This helps reduce serious fines or an increase in interest that might otherwise be imposed due to late payment.
- Direct debit increases the speed and efficiency of payments, as they are usually managed by the bank. Payments are made on time, and many banks inform the client when they see that there are not enough funds before the due date to take action.
- Since payments are made directly, a person does not need to set aside time to make payments alone. It saves a lot of time and energy.
Direct debit solutions is widely used all over the world to repay loans, renew subscriptions, and pay a billing cycle. The presence of such a tool allows customers to give constant instructions to banks, provide sufficient funds in their account, sit down and forget about payments.
About the Author
Pay Advantage is Australia’s leading payment solutions provider, offering a number of convenient and flexible payment options, from credit card processing to virtual terminals. Whether you’re looking for a reliable direct debit company or direct debit for small business provider, upgrade your ability to accept credit card payments with a leading provider who is PCI compliant and backed by award winning customer service.