05.14.10
Posted in Uncategorized at 4:48 pm by matt
Visit any whirlpool forum and you will find 100’s of complaints regarding direct debit. Given this, I’ll pose a question, is direct debit really that bad? Or is it the use of these facilities by the merchant that is at fault? Is it a case of bill payers just not meeting their obligations?
Firstly, we should point out that direct debit is a growing billing method throughout Australia. APCA’s historical figures indicate a 10% year on year growth in transaction volumes for the past decade. So why are businesses continuing to look to direct debit as a favoured billing channel? The answer is it’s cost. Direct debit is an inexpensive and, in most cases, automated billing solution. It is also a secure and proven billing channel used across multiple industries.
As well as these advantages, direct debit also provides an end point in the billing cycle. Many billers issue an invoice and see a payment due date come and go without receiving payment. This generally requires them to follow-up by issuing a payment reminder or a collection order to recover their fees.
With direct debit, a payment date comes and results in one of two events, the funds are paid or the payment bounces. In the second instance the biller can attempt recover the failed payment by either rescheduling the debit with the client’s approval (or sometimes this can be automated) or arranging for the payment through some other means. My point is, the biller always knows their position with direct debit.
Direct debit’s strength is also it’s greatest weakness. By signing a direct debit form, bill payers feel they are giving up a degree of control, they loose some visibility of their funds, they forget when a payment falls dues and may have insufficient funds at the time of the transaction. These are all undesirable events.
Our experience indicates that in most cases, the issues billers and bill payers experience in using direct debit comes down to poor communication. At a minimum the biller must provide the payer with the following:
- The total amount to be collected (or the minimum amount to be collected as part of a contract)
- The amount, frequency and start date of payments
- The process for changing, suspending or canceling the direct debit
Additionally, by sending reminders (through email or SMS) billers can greatly reduce some of the issues experienced by payers.
When the biller provides clear, easy to understand information to the bill payer and the bill payer meets their obligations by ensuring sufficient funds are available to be collected, direct debit remains the most efficient billing option available for collecting recurring payments.
If you have experienced problems with direct debit, have been unsure how to a cancel and authority, please do not hesitate to contact us and we will assist you where we can.
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03.09.10
Posted in Uncategorized at 2:49 pm by matt
PaymentHub has recently partnered with several security and monitoring companies to help them manage their cash flow. The entire process has been very enlightening.
Like most of our clients, these companies have an ongoing, service based relationship with their clients. They actively monitor the security alarms in houses and commercial properties and where required, run patrols and respond to these alarms. They also invoice their clients every month .
Over the last 12 months, the new clients we have assisted have carried between 50-100k worth of debtors past the due date of their invoices… sometimes until the next month’s billing cycle. Our brief was simple, implement a system which would reduce the number outstanding debtors. Below are the steps we took to help our client:
- We sent a letter to our client’s customers informing them that we were going to implement a new billing system to reduce the company’s administration (and thus keep their monitoring fees low)
- We also sent a direct debit authority so we could begin billing the following month (none of our clients mandated direct debit as a payment option – they left it up to their clients to decide how they would pay)
- We set up email reminders (and SMS reminders where suitable) totell people when they would be debited.
- We continued to send letters to those who had not yet signed up for the direct debit payment option with testimonials from others who had (generally convenience was the most common reason for people opting to switch to direct debit)
Within 3 months, we have 40% of our clients’ customers using direct debit as the preferred payment method. We have halved the overdue debtor list and now all new clients are put straight on direct debit.
This approach has allowed our clients to:
- Improve their cashflow – they now can predict with a high degree of accuracy how much money will be in their account at the end of the month
- Reduce their admin overhead – there is no more reconciliation of cheque and EFT payments. We have reduced the number of calls that need to be made chasing up outstanding payments.
- Focus on improving their own systems – the admin staff now have more time to work on streamlining other areas of the business now that a large number of payments are being taken care of.
What are you doing to improve your business? What can be automated to let you focus on providing your customer with the best service you can?
If you would like more information on PaymentHub Direct Debit and Billing – please contact us on 1300 909 339.
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01.11.10
Posted in Uncategorized at 11:29 am by matt
Over the past 6 months we have partnered with Peats Ridge Festival to deliver a lay-by ticketing programme for festival goers to pay their tickets off . This has been a great example of how direct debit can be used to make a product more affordable. While there have been a few hiccups along the way, the feedback from ticket holders has been extremely positive. During our dealings with festival goers, we have been told numerous times that the direct debit payment plans offered through PaymentHub provided an affordable way for them to attend the festival.
The lay-by system worked as follows:
- Working with Peats Ridge Festival, we determined what the payment plans would look like, the frequency clients would be billed and a maximum number of payments
- Festival goers would sign up on a PaymentHub direct debit plan that suited their requirements
- We wanted to make sure that the ticket buyers knew when the funds would be debited from their account so we issued both SMS and email reminders about upcoming payments
- On completion of the payment plan, Peats would issue the tickets
A really simple approach that delivered positive benefits to both Peats Ridge Festival organisers and their clients!
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04.29.09
Posted in Uncategorized at 6:52 am by matt
Welcome to Direct-Debit.com.au! This site is designed to help you get the most out of your billing process in general, and direct debit in particular.
Here you will find lots of information to help you decide what is best for you, and what to look for in your billing partner. Use the menu on the right to check out the helpful articles on the topic
Please take the time to read this site now, because it will hopefully save you lots of time later on.
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