For Finextra's free daily newsletter, breaking news and flashes and weekly job board.
As direct debit still is one of the most convenient ways to pay bills, especially when paying monthly recurring payments like gym member ship fees or monthly subscription of magazines or news. It is not only convenient for merchant but for consumer.
E-mandate looks really nice on SEPA paper, when consumer gives a right for merchant to bill me every month or just one time. The thing what in most of the e-mandate solutions is lacking is local solution which is hard to extend outside local and natural
country borders. For example, if service company (online movie rental for example) in Spain offers e-mandate for consumer to order service from Spain, but consumer is located in Sweden, then e-mandate needs to have swedish solution to identify customer. Not
too many companies are ready to take this extra step and offer several e-id solutions to offer DD as payment when service is online. Then recurring credit card option is better, even it will cost more for merchant.
We have been working on with few companies where offering e-mandate as service and identifying customers online. This DD online payment option has raised some interest with companies who would like to continue to use DD as one alternative solution to pay,
even business has transformed to online.
Now I would like to hear your real life solutions how you use DD, is there any electronic mechanism to identify customers online or do you just fill out online form and trust that company who gets it, can act the way you trust them.
The endgame should be e-invoicing with direct debit option inbuilt - like is the case already in Finland. I have written about this earlier - find it in this collection:
I totally agree with Bo. It can be e-invoice. Problem what most of the non-profit organizations are suffering, especially in Finland, how to replace old DD to e-invoice. We have e-mandate service to collect e-invoice addresses, but like every other citizen,
they do not know where is their e-invoice address or how it does look like. In the case of non-profit organizations, they would like to continue to use same process as they are used to, but replace DD to e-invoice.
Other issue is price what banks are charging when replacing current DD to Sepa DD. When price goes up from 1 cent to 90 cent, it totally kills monthly recurring payments, when average payment is only 5 €.
e-invoice is clearly cheaper - and better - same for consumers and business - and swims into accounting automatically
But it is still local solution. If I want to e-invoice from Belgium my customers using these solutions, there is no easy solutions, except Maventa.
Like new reference codes, e-invoice is still taking first baby steps. I have talked with some innovators to create one e-invoice address and that would be third party provided e-mail address. I would list all my e-invoice addresses to one place and every
time I get new invoice, this service tells me.Then I could use e-invoices all over SEPA area.
What comes to references, there is still huge problems when I pay from Belgium account to Finland. Most of mobile operators do have hard time to find my payments ie. cutting telephone lines.
19 Mar 2009
This post is from a series of posts in the group:
Payments systems visions, strategies, trends, pilots, forecasting, and planning for the short-, medium-, and far-term.