New tool makes late payments for an Exeter-based business a thing of the past

Online Direct Debit payments provider, GoCardless, has launched an online payment tool to enable greater numbers of small and medium sized enterprises (SMEs) across the UK to collect variable one-off and recurring payments by Direct Debit.

Traditionally only larger, more established businesses such as utilities providers and mobile operators have been able to access the infrastructure which underpins the Direct Debit system. As a result, SMEs were excluded from accessing the system by the banks, and forced to cede control of when they are paid to unreliable customers.

Richard Shepherd, owner of Richardesigns in Taunton says: “The best thing about GoCardless has been that my customer does not have to worry about invoices and making payments for lots of small bits of work. I just add up at the end of the month what is owed and put it through as a Direct Debit, which means both myself and my customer are able to manage the cash flow and spend less time on accounts and invoicing. For my business, the system is invaluable for managing cash flow and recurring billing.”

GoCardless is steadily transforming the payments space by allowing any business or individual to tap into the Direct Debit network and has been making such payments available to SMEs since November 2011.

The newly updated service enables SMEs to take full control of variable regular payments for the first time. Now, businesses can adjust the billed amount every month. Variable payment plans are the most common way of billing for a wide range of businesses, including those that rely on regular invoices such as accountancy firms, or subscription based businesses including day nurseries or gyms.

Late payment is a major issue for SMEs, with 59 per cent regularly struggling to get paid on time. Estimates suggest such businesses waste 14 days a year on average chasing payment, and are collectively owed £30 billion in overdue amounts. With GoCardless, businesses can sign up and start collecting in seconds, helping to cut delays and simplifying payment collection.

Businesses sign up online and can start taking payments immediately. Unlike traditional Direct Debit providers, GoCardless does not charge up-front, or have any monthly or hidden fees. Instead, a simple, low transaction fee of 1 per cent, capped at £2, is deducted from each payment, less than a third of the amount PayPal and others charge.

Commenting on the launch, founder Matt Robinson says: “Direct Debit is the most reliable way to take payments but for a long time small and medium sized businesses have been excluded from the system.  GoCardless gives them instant, easy access to the payment method that larger competitors have been using for years. With this new development to our service, businesses can always rely on prompt payment even if customers’ monthly bills vary.”