More and more businesses are waking up to the benefits of Direct Debit payment collections. But what is Direct Debit, how does it work and why has it become so popular?
What is Direct Debit and how does it work?
Direct Debit is a simple and secure method of collecting regular payments from your customers. Once a Direct Debit has been set up, the payment is made automatically on a selected date. That gives businesses the peace of mind they need to focus on their operations without having to worry about whether a payment has been made.
More than 80% of adults in the UK have at least one Direct Debit payment set up, with consumers having an average of five Direct Debits or more. That makes it a payment method consumers are proven to trust, understand and like.
What are the benefits of Direct Debits?
There are numerous advantages of collecting customer payments using Direct Debit. Not only do businesses know exactly when and much money they will be paid, but it’s also simple to set up and operate. Some of the other advantages include:
Increased customer loyalty and satisfaction
Studies have shown that the ease of use and level of protection provided by Direct Debit payments can increase customer loyalty and improve levels of retention. Customers are able to cancel their Direct Debits at any time, and you will be informed immediately if they do. Unlike credit card payments, there are also no issues with missed payments when the cards expire.
Many businesses also choose to offer an incentive such as an initial or ongoing discount to encourage customers to pay by Direct Debit. That can be a useful sales tool that further boosts levels of customer satisfaction.
All organisations that use the Direct Debit scheme have to pass a strict vetting process and are closely monitored by the banking industry. That provides reassurance and peace of mind to the customer that the companies they’re dealing with are reputable and trustworthy.
There’s also the Direct Debit Guarantee which protects customers against payments made in error and hugely reduces the risk of fraud. That makes Direct Debit the UK’s safest payment method.
Convenience and efficiency
Direct Debit is an extremely convenient way of collecting payments from customers for businesses of all sizes. The Direct Debit is paid into your account automatically, the funds clear quickly and any failed requests will be re-submitted for you. If there is a problem with a non-payment, it is flagged immediately so you can take action more quickly than if payments were made by other means.
Direct Debit also massively reduces the administrative burden on your team. Everything is done electronically and from bank-to-bank, so there is no paperwork to administer and store. That also boosts the all-important CSR and environmental credentials of your business.
Streamline your collections process today
London & Zurich specialises in providing Direct Debit services to all kinds of organisations, from fast-growing startups to SMEs and national corporations. Get in touch today and we’ll work with you to find the best solution for your business.