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6 Benefits of Direct Debit for Businesses and Customers

6 Benefits of Direct Debit for Businesses and Customers

February 16, 2022

Using Direct debit is a method that allows customers to authorize merchants to withdraw funds directly from their bank accounts. The benefits of direct debit are still foreign to some business owners, especially to those who have small businesses. They believe that implementing direct debit is complicated. Some even claim that implementing direct debit is unsuitable for small businesses. But, the truth is implementing direct debit can bring benefits, even for small business owners. What benefit does direct debit provide for both businesses and customers?

Direct Debit Benefits for businesses

Businesses can reap several advantages of direct debit payments, including:

1. Improves business cash flow

Small businesses organisation must have consistent, predictable cash flow; because unpredictability in cash flow and limited budgets can harm a company's finances and reputation in the short and long term.

Using the direct debit API scheme has been proven to reduce delayed payments and increase cashflow. Paying by direct debit system ensures that the company will receive payments on the specified date. It removes the risk of customers being late payment or forgetting to pay, resulting in cash flow deficits.

2. Gains the trust of your customers

Customer trust is critical for a company's long-term growth. Fostering a small group of loyal customers over time will lay a solid foundation for future success. The customer doesn’t need to go to the trouble of making payments each time, since customers can always easily track the funds sent. Advantage Direct debit is a highly regarded method implied by the bank. Customer trust and retention can both be increased in this manner.

3. Provides better visibility

Accepting direct debit payment gives you more insight into your company's cashflow situation. This will be extremely useful in predicting future possibilities, which allows you to concentrate your efforts on expanding your business. Customers also benefit from this because they can see the exact amount of money that comes from their bank accounts.

Many Direct Debit Benefits for customers

Not only for business owners, but the implementation of direct debit system as a payment processing method also benefits customers. Here are a few examples.

1. Gives complete control over their finances

Customers can control their financial situation and accurately predict cash flows. They’ll be able to know when cleared funds have been transferred to their bank account, which saves them time and energy. Especially because direct debit benefits helps is more flexible and provides more options for customer's accounts. It is also more adaptable since the business is involved in the decision-making.

2. Avoids late payments

Customers are often found to make late payments because they have a lot on their plates. With use a direct debit technology, they no longer need to change applications within the timeframe of the collect payment, they can even schedule the payment before the due date. Direct debit solutions allows customers to prioritize budgeting. They can determine which payments must be made immediately.

3. Provides a secured payment method

Direct debit payment is highly secure because transactions will only occur with the customer's approval and authorization. The Direct Debit Guarantee protects you and your money against errors in the payment of a Direct Debit, for example, if a payment date is collected on the wrong date, or the wrong amount is collected. Thus, the risk of fraud will be lessened since the involvement of third parties (other than customers and banks) is reduced.

So those were the key advantages of direct debit. Are you interested to set up direct debit in your business? Ayoconnect provides Direct Debit solutions that not only benefit your business but also offer a better transaction experience for your customer. Through integrating with Ayoconnect’s Direct Debit APIs, have access to 7 banks in Indonesia including; BRI, Mandiri, BNI, CIMB Niaga, Bank Syariah Indonesia, Bank Neo Commerce and Bank Danamon.