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Have you heard of direct debit as an alternative payment method to credit cards and wire transfers? Want to save money and time on your business’ payments process? Read on to find out how to make a direct debit!
What is direct debit, and why should my company consider using it?
Direct debit is an alternative payment method (APM) to credit cards and wire transfers. It is an authorized payment instruction to your bank where funds can be debited from your bank account.
Direct debit is a pull-payment method, meaning that funds are pulled (debited) directly from the payer’s bank account. In order for the recipient’s bank account to pull the funds from the payer’s account, the payer must authorize the recipient to do so.
Direct debit is a more affordable, more secure, and faster method for your business to make and accept payments, especially for companies that are heavily reliant on recurring payments or B2B e-commerce or are struggling with cash flow problems. Learn more if direct debit is right for your business.
How to Make A Direct Debit Payment Traditionally
Step 1: Contact the Company You Want to Pay
You must first contact that company you want to pay. For example, if Company A wishes to purchase construction materials from Company B, Company A would have to contact Company B to authorize them to debit funds from their bank account.
Step 2: Complete Direct Debit/ACH Authorization Form
In order for a company or individual to authorize the recipient’s bank account to debit funds from their account, the payer must complete and submit a Direct Debit Mandate form. In the United States, this form is also known as an ACH Authorization Form, because direct debit payments are executed via the Automated Clearing House (ACH) network.
Here is an example of an ACH Authorization Form from the National Automated Clearing House Association (NACHA), which manages the development, administration, and governance of the ACH Network in the United States.
Step 3: Pay
After you complete this form, you have authorized the recipient company to debit funds from your account, and the payment will be made according to the schedule on which you agreed on the form. You will usually receive an advance notice of the payment, as well as a digital receipt of the payment.
You can change or cancel direct debit payments by contacting the company and requesting that the direct debit authorization be revoked.
A Tool To Help You Make Direct Debit Payments
borderless™ processes direct debit payments on your behalf, simplifying the payment process for you and your business. Here’s how we help:
How It Works
Step 1: Request
Request a payment from your customer by entering their email, the amount you wish to receive and a description of the payment. You do not share your banking information with anyone or fill out any paper work.
Step 2: Client Pays
The customer receives an email notification or a link with the payment request information. The client can pay using their bank via our One-Time checkout feature or login to pay. The customer can connect their bank online in seconds without sharing any of their banking information with you. This process not only makes it simple but also increases the security and privacy of all parties.
Step 3: Pay Tracking
The customer gets a confirmation notification of their payment for record keeping and they get to track their payment in-real time. You also get notified that your customer paid and get an estimated time of arrival of when the funds will hit your bank account.
ACH and direct debit payments have never been easier than with borderless™.
No More Paperwork
With borderless™, there is no need for the manual process of filling out an ACH Authorization form. We handle all the complicated parts of direct debit for you and allow you to make payments fully digitally.
Quick B2B Pay Using Handles and Emails
Direct debit payments with borderless™ are simple and intuitive. All you need to do is link your bank account, and then you can easily make and accept payments via your dashboard. No more headaches of setting up a merchant account service with your bank for ACH payments.
No need to fill out complicated forms or complex routing or account numbers. That’s right, with borderless™ you never enter anyone’s banking information. You just create an account, sign in with your bank, and begin making/requesting payments via emails or handles!
Keep your Information Secure and Private
We protect your sensitive banking information by not sharing it with merchants, clients, or suppliers. That’s right, never share your banking information with anyone again. We ensure you and your money are secure by connecting payments from sender to receiver without ever exchanging bank details.
borderless™ does not store your funds, we just transfer the funds to their intended recipient’s bank where they are securely stored and insured. borderless™ partners with leading financial institutions and support over 3,000+ banks worldwide.
Payment Tracking and Confirmation
borderless™ offers real-time payment tracking to give you peace of mind, enabling you to always know where your funds are. You will also receive confirmation emails whenever you make a payment that you can keep for your records.
Provide International Reach
While direct debit payments have, in the past, been limited to domestic payments, borderless™ makes international direct debit payments not only possible, but also simple and affordable. Now, you can make direct debit payments around the world, simplifying the payment process and improving your business’ bottom line.
Making direct debit payments doesn’t have to be complicated. Create your borderless™ account today using the code BORDERLESS20 here or book a live demo here to receive free payment processing credits.
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Want to know more about direct debit?
We’ve written several blogs about what direct debit is, how borderless™ makes international direct debit possible, and if direct debit is right for your business. Check out these blogs for a more comprehensive understanding of these concepts!