SEPA direct debit is a huge step in the wrong direction - making direct debit more complicated for users and more expensive for invoice senders (who naturally add these costs into higher prices - the consumer always pays - every cent).
The obvious much better alternative is to integrate direct debit into e-invoicing - which is any way on the rise and is becoming the XML-stuctured data delivering
innovation platform for wide range of standardized administrative processes. Also e-payments (in the Nordics and Ideal in the Netherlands) should adopt the posting codes and VAT-reporting capability planned for e-invoicing.
It works as follows:
1. the invoice sender sends the entire invoice file to service providers (no need to register and keep track of who wants paper, direct debit or e-invoice).
How much cannot been saved with this? Billions... that would benefit consumers, SMEs and sellers alike.
2. the service providers sends e-invoices to e-banks for consumers who use e-banks (rapidly growing majority in all countries), and to automated payment service for those that have been using traditional direct debit and payment services (not ready to use
e-banking). How much cannot be saved in banks by this consolidation? Hundreds of millions..
3. the invoice receiver (consumer, SME etc) decides in the e-bank which invoices (type monthly rent etc) can be paid automatically and which she/he wants to see first.
Several banks have already provided this service - including offering a limit like (if my sons mobile bill is less than 30€ it can be paid automatically - if more I want to see it..). If e-bank is not used the automatic payment preference is agreed with
branch or contact centre.
In all cases a message (SMS or IM) to the mobile offers the press "a" for payment on due date (for those not on automated payment) and press "n" for real time payment (think of what kind of discounts this can offer...)
The hassle for the consumer is so widely eliminated in this model - and the cost for all so much smaller - that there must be really good reasons for not doing a u-turn. Or history will beriddle
"We do it - because we have decided so - long ago - before we realized that there are better alternatives."
So stop the train - before more money is spent on in-no-way sense-making complicated e-mandate puzzles - and do a proper re-evaluation. E-invoicing is coming anyway - in a couple of years.
I am listening - anybody ready to defend the antiquated model?