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If you're in the UK / Europe, using Direct Debit is a big win here - bank accounts don't expire. Something to optimise once you're big, rather than as a startup
by greysteil 9y ago
If you're in the UK / Europe, using Direct Debit is a big win here - bank accounts don't expire. Something to optimise once you're big, rather than as a startup, though.
- kowdermeister 9y agoBank accounts don't, but debit cards do have an expiry date, same as credit cards.
- epanchin 9y agoDirect debit is a debit direct from your bank account, using your non-expiring account number. Different from a debit card which is a debit from an expiring card.
- nicky0 9y agoI don't think Direct Debit is a thing in the US.
- joncrocks 9y agoThe nearest equivalent in the US is ACH - https://en.wikipedia.org/wiki/Automated_Clearing_House https://en.wikipedia.org/wiki/Automated_Clearing_House
- adventured 9y agoI pay several persistent monthly bills using the equivalent of direct debit in the US, which is ACH. My electricity, natural gas, and auto insurance bills all pull out of my checking account via that. It's pretty common.
- nicky0 9y agoCunningham's Law in action. Thank you.
- londons_explore 9y agoGocardless has an API to make direct debit fairly easy for most of europe. It's only really good for subscriptions rather than one off payments though. Not knowing if the payment was successful for 5 days is probably the biggest downside. Very low fees and low churn is the upside.
- aswerty 9y agoIf you're talking about B2B it's not just subscriptions - any continuous relationship can be a good fit for direct debits. For example many breweries in Ireland will sign up their clients (i.e. pubs and off-licenses) via direct debit. Then if they make a delivery the payment collection will be automated at the end of the month. In this situation direct debit gives the vendor the comfort of delivering goods without payment, and it gives the customer the flexibility of ordering without having to go through a purchasing process.
- blattimwind 9y agoFor European customers, you can make quick friends by offering payment via invoice and wire transfer. E v er y company is equipped to handle that efficiently; if you only offer credit cards, someone needs to get up and find "that guy with the company credit card for AWS".
- gingerlime 9y agoWe had a very different experience. First of all, we had lots of issues with Direct Debit. And it takes a good few days (1-2 weeks) until things authorize. In the meanwhile, you have to provide free service in the hopes that it does. Second, we had a potential gap with the equivalent of chargebacks. A customer could contact us for a refund, and we issued it. Then their bank (or them?) blocked the payment, which results in another refund + chargeback fees. So we can actually lose money... Third, and take this with a grain of salt, because it could be specific to our audience, but we actually A/B tested it, and with/without Direct Debit option, our revenue was more or less the same. Some complained, but lots accepted using Paypal / CC. We're still relatively small, so perhaps your comment applies and we're simply not big enough, but I'm really unsure how much of a big win this is. YMMV.