Also known as ACH or direct withdrawal, direct debit allows businesses to collect customer payments by taking money directly from the bank account of your clients. It is one of the most popular methods for those businesses that sell various services.
This payment method works unlike a credit card, which often seems intimidating, but can be more beneficial for a business. Many business owners can weigh their options to determine whether or not they should set direct debit to take their business to success and growth. Here are some business types that can enjoy a passive stream of income, giving their business cash flow stability.
Fitness & Health Businesses
Timely payment collection tends to be one of the most stressful times for health & fitness businesses. They often get overwhelmed by their customers, avoiding to pay them. While these businesses do not want to both their clients about the payment, they need their clients to pay a monthly membership payment to keep cash flowing. Auto-recurring payment, such as direct debit, can help them meet their challenges by creating an automatic payment cycle.
Law firms and legal practices may feel cumbersome to manage retainer sums. It would be expensive to set up monthly wire transfers from the client’s bank account or process credit cards. Direct debit allows them to collect retainers every month and save a considerable amount of money on wire fees. Moreover, it enables them to leverage automatic recurring payments so that they can ensure getting paid on time every time.
Daycare & Childcare Facilities
Running a daycare or childcare facility is not as easy as it may sound. Running after those parents who do not pay their monthly childcare fee on time is probably the last thing the childcare center owner would want to do. It can make their cash flow become unpredictable and put their business at risk. Setting up a direct debit allows them to automatically receive their monthly payment directly from their clients’ bank account and subsequently run their business smoothly.