What is Direct Debit? How does Direct Debit work?

what is direct debit

What is a direct debit?

This is a question I hear a lot.  It’s a recurring payment made by a customer to a business and generally for a service.  A good example of what is direct debit payments is one made by a fitness club member to their gym.  Other types of businesses that use direct debit include coaches, clubs, vets, educators and personal trainers just to name a few.

Do you need a direct debit in your business?

Now you can better understand what is a direct debit is it still something you think you may need?  Here are a couple of points to think about:

  1. Are you selling a service because it works really well for services?
  2. Direct debits work really well for making large payments more affordable.
  3. Direct debits work really well for ongoing payments.

Here is a link to an article on why direct debit is important in this business.  For start ups it can help reduce payment terms. Here is a post with a business showing you how they use direct debit.

How does a direct debit work?

Ezypay will give you a direct debit request form for your customers to fill in.  This form can be a web based form or a paper form.  When your customers fill this out they are giving Ezypay the ability to take money out of their account and put it into yours.

Direct debit only

Ezypay only do direct debit which means we give you the money once we have collected the money.  We don’t give you the whole amount of money and then collect the rest from your customer.  This type of service is called direct credit and is more expensive than what we do because there is a greater risk involved.  Direct credits work really well for products but are more expensive than direct debit.

Open a direct debit account with Ezypay

To open a direct debit account with Ezypay you will need to fill in an application form.  One of our sales team will email you this form and you can get started. Once you get your application form back to Ezypay fully completed, it will take up to 48 hours for our team to assess your application and set up your account if you are approved.

So hopefully now you understand what is direct debit and how it works at Ezypay. For more information on direct debits or setting up a direct debit account please hello@ezypay.com or call 1300 762 726.