Direct Debit Payment Explained

Date: 2011.02.22 | Category: Billing Solutions | Tags:

Something that is very rarely spoken about as a means of payment is Direct Debit, this is a popular payment method across Europe and, especially in the United Kingdom. Direct Debit can offer your surfers a cost effective, easy way to pay for products and services from your site especially, if they have a ‘recurring’ cost associated with them.

Direct Debit – What Is It?

Direct Debit is quite possibly one of the simplest ways to collect funds from your surfers basically, a form is filled out by the surfer, where they enter their bank payment details, account number, name, sort code. Then, the form is signed either electronically or, in person by the customer, in this case, electronically by the surfer.

Once you have the direct form filled in by your surfer, you may continue to deduct funds from the bank account on the Direct Debit form until such a time whereas the surfer cancels the Direct Debit agreement.

At the present time, around 45% of the population in the UK currently choose to pay their utility bills online by Direct Debit and, around 75% of the total population in the UK have used Direct Debit at least once in addition Direct Debit is also an alternative method of payment in the vast majority of European countries and, it is also used (although not as much) in Australia.

Direct Debit – What Are The Cost?

Direct Debit payments cost around $0.5 for you as a merchant to process, however, this charge, rather than happening on the processors side of the transaction, happens when the Direct Debit request hits your banking account.

This in itself is god news after all, you now ensure that if a membership or product costs $35 per month, you will get virtually the full cost of that membership until such a time when the surfer cancels the direct debit at their bank.

Direct Debit – An Overview.

All in all, Direct Debit is probably one of the only payment solutions that allow you to collect the full price from your surfer at the point of sale and, furthermore, because the Direct Debit method of payment is trusted, this offers your surfers something that no other form of payment can – Peace of mind. There is however one major drawback to this method of payment, it is very hard to find processors that will allow you to utilize Direct Debit on your sites in fact, to date, the main use for the Direct Debit payment method has been payments of utility bills, Gas, Electricity, Water Supply, etc however, many financial institutes will let you pay for goods and services using Direct Debit on ‘credit’ terms which can vary from 1 day to a year interest free or, not as the case so often is.

I strongly feel that within the next 12 months this method of payment could become advantageous to the adult webmaster however, the current online payment processors need to be pushed in order for this to become as widespread as credit and debit card processing is. That said, there are a few online adult companies already accepting Direct Debit as a form of payment so, at least the ‘DD’ revolution has already started.

Article written by Lee