Online payments provider GoCardless today launched a new online Direct Debits payment tool to enable greater numbers of small and medium sized enterprises (SMEs) around the UK to collect variable one-off and recurring payments by Direct Debit.
Traditionally only larger, more established businesses such as utilities providers and mobile operators have been able to access the digital infrastructure banks use to underpin the Direct Debit system.
But GoCardless is steadily transforming the payments space by allowing any business or individual to tap into the Direct Debit network. The business has been making such payments available to SMEs since November 2011. It's services have proved to be hugely popular, with transaction volumes growing by 40% each month since launch.
The newly updated service makes Direct Debits even more flexible by allowing such businesses to adjust the monthly amounts customers pay. A wide range of businesses are expected to benefit - including those that rely on regular invoices such as accountancy firms, or subscription based businesses including day nurseries or gyms.
Simon Powers, founder of Web Design agency UK Site Builder is a typical example of a business that is set to benefit. He says, "We used to spend hours each month wasting team time chasing up regular payments - something we just can't afford to do as a small business. We need greater flexibility to be able to adjust our payments, and switching to this method of direct debit has really simplified things. Doing so enables me and my team to focus on key decisions and running the business."
Late payment is a major issue for SMEs, with 59% regularly struggling to get paid on time. Estimates suggest such businesses waste 14 days a year on average chasing payment, and are collectively owed £30bn in overdue amounts. With GoCardless, businesses can sign up and start collecting in seconds, helping to cut delays and simplifying payment collection.
Businesses sign up online and can start taking payments immediately. Unlike traditional providers, GoCardless doesn't charge up-front, monthly or hidden fees. Instead, a simple, low transaction fee of 1%, capped at £d;2, is deducted from each payment - less than a third of the amount PayPal and others charge
Commenting on the launch, founder Matt Robinson said today: "Direct Debit is the most reliable way to take payments but for a long time small and medium sized businesses just haven't had that option. GoCardless gives them instant, easy access to the payment method that larger competitors have been using for years. With this new development to our service, it's more convenient and easier than ever."