What is Direct-Debit?

Learn how to collect recurring payments with PaySimple’sonline billing software and direct debit features.

What is direct debit? How does it work?

A direct debit (or direct withdrawal) is a financial transaction in which one person (or company) withdraws funds from another person’s bank account. Withdrawals are done through the ACH network, and the process is convenient because the customer only has to provide their bank information once. Signing up for direct debit means the customer has agreed to a recurring payment with a business that will automatically be deducted from their bank account.

Direct debit is common for paying bills such as utilities, car loans, magazine subscriptions, gym memberships, etc.

How can direct debit help my business?

Offering and using direct debit can help reduce the number of late payments from your customers. Instead of waiting for a check in the mail, payments are debited directly from their accounts.

With recurring direct debit payments, you’ll know exactly when you’ll get paid and will be able to better predict your cash flow every month.

Your accounting will become more efficient, and you can streamline your billing and record keeping by saving account information for future payments.

With direct debit you can:

  • Combine credit, check, and direct debit reporting under one system
  • Accept payment via phone, online payment form, or recurring billing without a check number
  • Store account information for recurring payments

How does direct debit help me save time?

Scheduling direct debit payments on a recurring basis can save you time on follow-ups and sending invoices.

When payments are due, an automatic reminder is sent to notify your customers when the funds will be collected.

Once the ACH transfer is complete, a receipt is sent, making the whole process automatic – and you can spend more time running your business.

Direct debit saves you time with:

  • Recurring billing for automatic collection of payments
  • Automatic emailed receipts and notifications
  • 48-hour notification of any non-collection of funds

Let PaySimple help you keep customers and increase their loyalty

By directly debiting from a customer’s account, missing payments due to expiring credit cards is a thing of the past.

Using PaySimple’s online payment solution gives you peace of mind because payments will process automatically, allowing you to focus on building those long-term customer relationships.

Customers will also appreciate never getting a late payment reminder again. With direct debit their payments will be on time, every time.

Direct debit provides:

  • At only $0.60, you have a convenient and economical way to accept ACH payments
  • Fewer touch points during processing, keeping customer information secure and confidential
  • An easy payment solution for customers without a credit card

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