Instant bank transfers by GoCardless – a way of being paid faster
GoCardless is mostly known for Direct Debits. Direct Debits are a great way of collecting payments from your clients and are more effective than just sending invoices with your bank details on them and waiting for a payment. Your clients are busy too. Then add chasing them on top of that and you are not only short of cash but also short of time which you can’t get back.
Direct Debits work great with subscriptions, repetitive services or memberships. But what if you just need a one-off payment from your client? If you send them a Direct Debit mandate, it may scare them. Why would they be giving you an ability to collect payments from their bank account if they need something from you just this one time? If this is your only option of paying, it will definitely delay you getting the money you deserve.
And here’s where instant bank transfers by GoCardless are an ideal solution.
What is an instant bank pay by GoCardless?
Instant Bank Pay is a feature offered by GoCardless that allows your customers to pay instantly and directly from their bank account. This type of payment is a Faster Payment meaning you get your money much quicker than when using a Direct Debit facility.
Why should you consider offering instant Bank Pay by GoCardless to your clients?
Convenience – your customer can pay directly from the invoice they receive. If you integrate Instant Bank Pay with your accounting software, for example, Xero, upon receiving your invoice, your customer can click on the link provided and make an instant payment.
Security and sense of control for a client– with Direct Debits, even though your customer is protected by a Direct Debit guarantee, when they need to pay you only once, they may feel they lose control over the payments; it’s you who clicks the button to make a Direct Debit collection. Instant Bank Pay puts them in the driver’s seat giving them a sense of security which then makes them more willing to pay
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Reduced fees – you can offer card payments for clients but the cost of these to your business can be higher than offering instant bank transfers with GoCardless
Real-time confirmation for you – you know immediately that your client made a payment. It helps you control your cash flow better but also makes a good impression in terms of customer service – the quicker you know someone paid, the quicker you can stop sending them unnecessary reminders which can be annoying for clients who paid
Improved payer conversion – due to simplicity for your clients of paying via Instant Bank Pay by GoCardless, the number of people willing to pay and pay you quickly improves.
Why not just use normal bank transfers instead of instant Bank Pay by GoCardless?
You may be thinking that sending your bank details on an invoice to a client is the same as the instant bank transfer function offered by GoCardless. However, a normal bank transfer means your client has to open a separate window or go to their phone. Next, they need to type all the details to make the payment. If this is the first time they’re paying you, they will also need to add you as a payee. And how many times your clients forgot to put the invoice number in the payment reference and then you can’t guess who paid you and for what?
With instant bank transfers, all the necessary data is pre-populated from the link the customer receives. Not only can you easily identify the payment but it saves lots of time for your client. In today’s world where everyone is busy and always in a rush, a smooth payment experience is a huge benefit which your clients will appreciate.
Why not get in touch with our professional Wantage and Oxford accountant today to see how they can help you and your business achieve its potential.
Frequently Asked Questions
If you are seeing an error message Sorry! An unexpected error has occurred. Please try again later in Xero when making a payment via Instant Bank Pay, it is very likely caused by a minimum transaction limit set by GoCardless. If your currency is GBP, the minimum limit is £1. If you are testing Instant Bank Pay in Xero and you created a test invoice that is less than £1, increase the amount to at least £1 and test again. The error message should disappear and you should be able to use the Instant Bank Pay function from GoCardless with your Xero sales invoices. Different currencies have different transaction limits in GoCardless.
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