What is a direct debit and how can it help business collects payments from customers?

Direct debit is an automatic payment method in which your customers will authorizes you to collect money directly from their bank accounts at any time when their payment is due. It is used in regular payments of fixed amounts such as utility bills, mortgage payments. It a great method of payment when you have a business that deal with regular payments from your customers. There are ways direct debit help business to collect payments from its customers.

Speed. The money collected from your customers is deposited directly into your bank account thus avoiding the manual payment from customers. You don’t handle huge sum of money or wait for clearance of cheques. This enables your business to be more productive and efficient which leads to increased profits and the business is well conducted.

Allows you to improve cash flow and control collection of payments. Collecting payment from customers through direct debit enables your business to get the income on the expected date. Since you receive the payment automatically after the customer authorizes it, this provide control over the payments. Also lead to improved cash flow thus planning effectively on how to invest the income.

Payments are made on time. Direct debit allows you to be in control therefore, after the payment is authorized you can collect them without having to consult your customer. This will save you time and money that the business could use to send reminders and chase for customers with late payments as they will always pay on time.

It provides efficiency and convenience. It is a convenient way of making payment as you get the money into your account automatically, the funds clearance is quick. In case there are requests that have failed in the process, they are sent back to you and when a non -payment problem arise, it is immediately raised so that you can quickly take an action.

It is a flexible method of payment. Direct debit is flexible thus you have the right to change the frequency and amount of payment without the customer having to re -authorize it. Therefore, you can increase the prices of your products without having to hassle a lot with the administration.
Also your customers are guaranteed of an advance notice in case the amount and date changes.

Provide a safe and secure means of payment. Your company will go through vetting before you are authorized to use the direct debit payment solution and the bank will closely monitor your security and efficiency. There is a direct debit guarantee used by the bank to protect you in case there are errors that arise during the process of payment. Also, it help in addressing disputes that may occur between your business and the customer.This help your business to be safe from any payment errors that may occur.

Debit payment is a great and profitable payment solution regardless of your business type. It enable your business to maintain a steady cash flow throughout the year and you reduce your employees use of paper work which saves you money. Your customers also benefit as they don’t have to make monthly incurring payments or enter their bank details every time they get your services.

About the Author
Pay Advantage is Australia’s leading payment solutions provider, offering a number of convenient and flexible payment options to small and large organisations. Whether you’re looking for a reliable direct debit provider, custom virtual terminal, upgrade your billing with BPAY or ability to accept credit card payments, they can provide it all backed by their PCI compliant technology and award winning service.