While most people are familiar with how Direct Debit method works, they are not quite familiar as to how business and themselves can benefit from it. At the moment, direct debit is definitely among the most popular payment methods. It is preferred by many businesses and individuals all across the world. Now, if you are one of those who doesn’t exactly understand the benefits of this method, we will try to clear things up by outlining the most notable advantages.
For the businesses
An improved cash flow
If you are a business owner, with the direct debit solution, you will always know exactly then the funds will be cleared and transferred to your account in advance. This will greatly reduce the possibility of errors and oversights, as well as any cash flow issues. This will also greatly help your business’ staff members, especially the accountants. Since your customers will set up their Debits to ensure timely and regular payments, your accountants will have a much easier time chasing late payments and sending out reminders.
Retention and improved customer loyalty
If you are looking for cheap and reliable ways of increasing your customers’ retention and loyalty, the Direct Debit payment method will surely help. Once you finish setting up the payment method and once the payment front becomes transparent and calm, your customers will certainly become happy and willing to stick with your business. They will also feel much less inclined to abandon you and switch to your direct competitor. Simply put, they will always prefer to stay with a certain company and continue using its services if they are familiar with it and trust its payment method. Also, keep in mind that the Direct Debit is designed to protect both the businesses and the customers. Therefore, if there are problems, both will be protected.
If you are concerned about the environment and your business ethos include environmental considerations, then using the Direct Debit method is a no brainer. Given that this method completely functions on a digital level, you will have no need to deal with tons of papers and physical documents, which will greatly benefit the environment.
What about the customers?
We have seen how a business can benefit from the Direct Debit method, but, what about the customers? Well, their benefits are much less subtle. However, there is still one major benefit, and it comes in the form of a Direct Benefit Guarantee Scheme. So, what are the direct debit guarantee scheme rules and how can you benefit from them as a customer?
With this type of coverage, you will be told about any changes to the date, frequency, or the amount of a payment well in advance. You will also be in a position to agree or disagree with the proposed notice period as well. However, keep in mind that if there is no agreed period, a financial institution will implement ten working days.
If you want, you are allowed to cancel a payment at any time before the payment is supposed to be made. If you have made a cancellation, but the payment was still made, you will be entitled to a refund.
If there are any payment errors or irregularities, you will be entitled to an immediate refund from your financial institution.