How To Move Your Customers To Direct Debit

Moving your customers to Direct Debit makes sense for your business, but you also need to make sure your customers also see the benefit. If you’ve been sending your customers monthly or weekly invoices, or depending on them to remember to transfer you cash for your services, then asking them to switch to a Direct Debit system may feel daunting. It may even be met with some resistance.

In this helpful guide, we will step you through how to move your customers to Direct Debit, and what to say if they have any concerns.

Why now is the time to move your customers to Direct Debit:

If you find yourself constantly following up customers about unpaid invoices, late paid invoices or even incorrectly paid invoices, then moving to Direct Debit could save you precious time. You’re not alone if your customers pay your invoices later than you would like. On average, Australian supplier invoices are paid 26.4 days late, according to a 2017 inquiry into Payment Times and Practices. 

If you’re a business owner who finds talking about money and payments owed with customers a tricky conversation topic, then Direct Debit can also make these awkward exchanges a thing of the past. 

One thing is clear, Direct Debit saves you time and wasted energy chasing unpaid and late invoices which means you can focus on the reason you got into business in the first place – pursuing your passion.

How you can tell your customers about your move to Pay Advantage:

A few things to let your customers know about Direct Debits handled by Pay Advantage:

  • Direct Debit can be used to pay for regular payments of all types – including varying amounts, subscriptions, and regular installments.
  • Pay Advantage is a leading Direct Debit provider in Australia and is used by over 7,000 Australian businesses and is a secure service that is committed to protecting merchants and their customers.

Why Direct Debit is better for your customers:

  • You only need to set up a payment once. Complete simple online form once and then customers won’t have to remember to pay. Which means no disruptions to your service, subscription or membership.
  • Unless you change bank accounts, you won’t have to worry about updating your payment details.
  • Paying by Direct Debit means you’ll know exactly how much you’re paying and when it will be withdrawn at regular intervals.

Make sure to reassure your customers and let them know the Direct Debit can be paused or cancelled at any time. They can also choose to have Direct Debits taken from their bank account or credit card. Direct Debits can also be cancelled by notifying the business owner or your financial institution.

It may also help to send the Pay Advantage website to your customers to let them read more about the service. Remind them that organisations like Spoitfy and Netflix use Direct Debit to provide a better customer experience where the service is always available without needing them to verify payments every month.

When to switch customers to Direct Debits:

You can switch your customers to Direct Debit at any time, but there may be times during your business relationship that make the most sense and allow the transition to be easily explained. 

These include:

  • When you are signing up a new customer, “Sometimes our customers can be quite busy and authorising payments can be a hassle, we could set up a Direct Debit so that we can easily manage payments as they come up. Would you be interested in setting that up?”
  • When a customer is late paying you and you are chasing a payment
  • When you are changing pricing or package inclusions
  • When you change business names or refresh your brand logo/website

How to ask customers to switch to Direct Debit:

Every Direct Debit you wish to set up for a customer must start with a formal authority. This authority is in the form of a Direct Debit Request (DDR) which outlines:

  • The terms and conditions that will govern the Direct Debit
  • How much is to be drawn and the terms of the ongoing schedule
  • The BSB and Account from which the funds should be debited from
  • Signed authority from the account holder

Pay Advantage offers three options for Direct Debiting:

  • Paper Authority Form (DDR)
  • Paperless/Electronic Authority (eDDR)
  • Variable Authority (DDR & eDDR) 

DDR forms can be downloaded from the secure client site by clicking on MORE from your left-hand side menu panel then DEBIT FORMS. You can not alter the terms of any conditions on this form, however; you are permitted to place your logo on the Direct Debit Request form.

Once the DDR has been uploaded Pay Advantage must approve the schedule. This is generally done within a few hours of uploading the DDR. If any information on the schedule does NOT match the DDR the schedule will be rejected and you will be required to re-submit the schedule.

When a new Direct Debit schedule is either approved or rejected you will receive a notification by email, and also an entry in the notifications. 

Once your Direct Debit schedule is approved, we will begin to draw payments in-line with the terms of the schedule. You should monitor your notifications for any items that may be dishonoured. 

What to say if a customer objects:

“I’m not interested in paying this way”

  • Outline the benefits to the customer 
  • Show how easy it is to do 
  • Add additional benefits such as working with them to let them choose their payment date or split payments over multiple installments.

“I don’t have time”

  • Show how easy it is to do 
  • Outline how they’ll save more time this way 

“I want to stay in control of payments”

  • Let them know that you will still send invoices or agree to the payment amount in advance.
  • Tell them they are notified after a payment is taken and they can cancel their Direct Debit at any time.

“I always pay you on time, so I don’t see why I should have to change”

  • Thank them for being a prompt payer, but explain the challenges you have in your business such as cash flow prediction.
  • Explain that having customers on differing methods is more work for you, and your efficiency ultimately benefits them, so you’d appreciate it if they could work with you to help you serve them better.

The advantages of Direct Debit:

Pay Advantage allows you to set up recurring Direct Debits for your customers – making it easier for them to pay you. Best of all you can easily change the debit amount and automatically handle payment failures, reducing the amount of administration time you spend on getting paid.

Pay Advantage also gives you variable Direct Debit options, permitting you to take up to an agreed amount of money. This is great because you can change the amount paid for every installment. Now your customer can pay in advance, you can add additional services every other installment, or catch up on a skipped payments by simply changing the amount as you go. 

You’re also in complete control of how the Direct Debit is run for each customer at all times. You can refund a payment, skip a payment, change the dates of the Direct Debit for future payments, pause payments, and have customers update their details online if required. You can also cancel a Direct Debit whenever needed. 

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