Busting the biggest direct debit myths

Direct debit is one of the most popular and fast growing payment solutions available today, and is quickly developing a strong foothold in the Australian market.

However, misconceptions about direct debit are still floating around, thanks to the lock-in contracts and inflexible terms of days gone by.

The truth is, direct debit provides both you and your customers the flexibility of automated payments with varying amounts and frequency. Our customers know this, and are working to educate their own customers about the benefits of direct debit.

If you’re not convinced, here are some fast facts you need to know about direct debit - Australia’s easiest payment method.

It’s growing in popularity

Direct debit is one of the fastest growing payment methods in Australia. According to the RBA, direct debits grew 13.2% of our national yearly non-cash payments in the five year period from 2012/13 to 2017/18. And people are trusting direct debit for big purchases, too: the average value is around $2,950.

“Australian consumers are excited about direct debit and the potential convenience and security benefits this platform can offer.”

The rise of non-cash payments in Australia is prolific, and direct debit is a core part of that growth. More and more people are using online banking for everyday use, and automating bill payments with direct debit is part of that. Clearly, Australian consumers are excited about direct debit and the potential convenience and security benefits this payment method can offer.

It is totally secure

Considering the increasing sophistication of cyber security threats, it’s understandable that many business owners are concerned about the security and safety of their payment processing options. In fact, cybersecurity was listed as Australian businesses number one concern moving into 2020.

“Direct debit is actually a highly secure and reliable payment platform”

However, direct debit is actually a highly secure and reliable payment method, particularly when you use a payment provider that is fully PCI compliant. Not sure what that means? Find out more about PCI compliance, here.

It streamlines and automates processes

In the past, direct debit has drawn some negativity due to its reliance on paper forms and manual processes. Not any more. Modern paperless direct debit solutions are extremely streamlined and automated, with consumers able to quickly and easily input their details online. No paperwork needed.

“Modern paperless direct debit solutions are extremely streamlined and automated”

From there, customer payments automatically begin on a pre-selected date, with minimal input from the consumer or the business. As a result, both parties are able to save time and improve productivity – a great outcome for everyone!

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Customers are comfortable with this method of payment

Some businesses believe consumers will be unwilling to sign into a direct debit agreement, as doing so requires them to commit to regular ongoing payments that are automatically processed. On the contrary, most customers enjoy the convenience.

900 million direct debit payments were made in Australia during 2019, totally over $2.7 trillion worth of payments, demonstrating that Australians are more than happy to sign up for direct debit payments.

Customers can ‘set and forget’ with direct debit payments and know they can cancel their direct debit easily. Direct debit saves customers’ time, and offers peace of mind when it comes to making time-sensitive payments.

“Direct debit also mitigates incidents of bill shock”

Direct debit also mitigates incidents of bill shock – unexpected and excessive bills that are often incurred due to late payments, and can lead to weakened customer relationships and increased customer churn.

The direct debit payment solution is flexible

Direct debit payment solutions don’t need to be excessively rigid and inflexible – a good direct debit payment platform should cater for adjustments of payment terms throughout the life of the contract.

This means you are free to work with your customers to identify a payment schedule that suits you both. This will let you focus on customer relationships, not managing recurring transactions.

The Ezidebit direct debit platforms available that cater for varying payment set-ups, and can also be used to coordinate BPAY payments, giving your customers greater freedom of choice regarding how they pay their bills. We unite Direct Debit, BPAY, EFTPOS, and Real Time Payments under one system that is PCI DSS Level 1 accredited.

It’s not expensive to implement

A direct debit solution tailored to the needs of your business can be extremely affordable and easy to integrate, particularly if it is cloud-based. It is important to consider the opportunity cost of not offering direct debit – inconsistent cash flow and reduced customer satisfaction.

After you have rolled out direct debit in your business, review your payment methods and volumes to see how many of your customers are taking advantage of automated payments, and how many you are still processing manually each period. This will give a good idea of the investment return - and we’re sure you will be happily surprised.

If you want to find out more, or discover if it’s right for your business, contact one of our team on 1300 763 256 or fill in this short form and we’ll be in touch.