Direct Debit API for 1%; max £2

https://gocardless.com/

by alexchamberlain • 14 years ago

127 92 14 years ago

gocardless.com

alexchamberlain10• 14 years ago

What a fantastic idea!

6ren• 14 years ago

> Currently we are UK-only. We will be rolling out internationally soon.

alexchamberlain10• 14 years ago

I don't think this is a bad thing - there are plenty of British only websites, and IMHO, too many US-only payment solutions.

mattmanser• 14 years ago

Far, far too many.

If they've done this right then this is excellent! This has been such an obvious gap in the market too, I'm glad someone's tackling it.

dan_b• 14 years ago

This is great news. Finally a UK-based payments solution. The difficulty/cost of getting a Merchant Account and taking payments is what has put me off beginning any of my weekend projects in earnest. Wishing you the best of luck with this.

justincormack8• 14 years ago

That was good to see. For EU payments (no sign they are going global) this would make a great solution. Less use for me while still UK only, but I am sure there are lots of UK businesses that could start using it now.

dedene• 14 years ago

Any ETA for a rollout in EU?

hirokitakeuchi9• 14 years ago

We are looking to roll out across EU as soon as possible. We are in discussions with the banks to make this happen.

eliaskg• 14 years ago

This seems to be e really strong competitor to stripe.com. But what all these services are lacking at the moment is international support.

matthewking7• 14 years ago

Doesn't look like you can make payment requests via the API without sending the card owner to the gocardless site first.

Our need is to be able to take a customers card details, store it with a provider (and get an auth code) and then bill that card via an API. Hopefully they'll expand on their current offering soon, UK businesses really need more options in this market.

alexchamberlain10• 14 years ago

GoCardless don't charge cards... they take Direct Debits.

Uchikoma2• 14 years ago

Hope they come to Germany.

justincormack8• 14 years ago

They say in the FAQ they will cover all of EU soon...

Uchikoma2• 14 years ago

Thx

balac• 14 years ago

Its a great idea, but will customers really be comfortable providing websites with their bank details in order to make a single purchase?

eis• 14 years ago

This is how a lot of payments are conducted in Germany. It's easy and secure for the customer as he can reverse fraudulent charges.

What makes this different than providing websites with your credit card details?

blibble• 14 years ago

liability in the UK is different: credit card transactions are heavily protected (you're guaranteed to get your money back), whereas direct bank transfers are vastly less protected (with the exception of direct debits).

can you even have a one-off direct debit? I didn't think the system was really designed for that.

mseebach4• 14 years ago

Presumably you'll set the direct debit up on the GoCardless service, and then authorise each payment through them. So just like a third-party credit card processor, the merchant never sees your details, just that the payment has been authorised.

hirokitakeuchi9• 14 years ago

This is exactly how our service works. We never share your banking information with anyone.

guidupuy• 14 years ago

What's with the £2 limit though? And what prevents me from splitting my payments into several £2 chunks?

dazbradbury• 14 years ago

That's the cost to the seller:

No set up fees, no monthly minimums, and no hidden charges.

Simple, transparent pricing - we charge just 1% per transaction up to a maximum of £2.00.

timruffles• 14 years ago

£2 is the most you'll pay as a fee. 1% or £2, whichever is lower.

justincormack8• 14 years ago

I wonder if there is a minimum of 1p? Either way this is potentially compelling for micropayment type solutions...

alexchamberlain10• 14 years ago

The limit is how much they charge you...

dave1010uk• 14 years ago

The £2 limit is on the transaction fee, not the maximum payment. From the FAQs:

    ... you will never pay more than £2.00 for a transaction.

rmc• 14 years ago

I thought it was some sort of new 'micropayment' service aswell from the HN title of "Direct Debit API for 1% max £2". Twas only after reading the website that I realised the max £2 is for their fee.

icebraining• 14 years ago

I don't get why the US and UK rely so much on payment methods that rely on the secrecy of some unique codes, that you have to trust every payee to secure. Seems backwards to me.

Here in Portugal we have both direct debits and "service payments" (for one-off stuff), and in both cases the payee is the one telling the bank about the payment (usually on the bank's website or an ATM). There are codes involved (the merchant's), but since they can only be used to transfer money to them, they don't have to be secured.

alexchamberlain10• 14 years ago

That requires your customer to actually go to the banks website/ATM and pay you.

nixy3• 14 years ago

Yes, and no. Bank has APIs for including/opening popup with a very simple "focused on this transaction only" form for a quick payment sign from the user. So this is integrated into the seller site purchase flow.

smackfu• 14 years ago

What secret code are you referring to? To do a direct ACH transfer to someone, you need only an account #, and that's not a secret since it's on every check you give out.

misterbwong• 14 years ago

Is this also true the other way around? Seems like security can be lax when depositing to an account but should be much more strict debiting from an account.

brador5• 14 years ago

At first I thought this was awesome. Then I realized I would never open my bank account to anyone again after a Paypal incident.

Great price and I'm in on that, but the system needs work.

mseebach4• 14 years ago

What's the Paypal incident?

brador5• 14 years ago

Just a personal incident. They took the cash out of a connected bank account following the classic "I didn't receive the delivery" scam dispute where I was the seller.

timthorn3• 14 years ago

This is protected by the Direct Debit Guarantee scheme:

http://www.financial-ombudsman.org.uk/publications/ombudsman...

richardburton• 14 years ago

This is fantastic. Payments are still so shit across the world. I have a lot of respect for startups that try and take on the task of changing them for the better.

mseebach4• 14 years ago

Awesome. I looked into doing this in Denmark about two years ago, but it fell to "schlepp"-avoidance.

It's worth noting that PayPal already does exactly this, although I can see the value in cutting them out of the loop.

alexchamberlain10• 14 years ago

How much do they charge you?

mseebach4• 14 years ago

About £0.50 per payment, regardless of size. Certainly quite affordable, I chickened because the terms and conditions if you're handling payments for others was grey area at best, and it was hard to determine what regulations would apply for a cash-holding transaction-middleman.

They also only process direct debits monthly, and the payment needs to be advised weeks in advance, so the debtor can object. Fine for recurring memberships etc., not really suitable for one-off payments.

Finally, there's a deeply entrenched national debit-ish card, run by the same nominally private sector entity running direct debits. They essentially write their own rules for the entire sector in Denmark, and I wasn't really too keen on going up against them. So perfect match for the schlepp-essay :)

sborsje3• 14 years ago

Isn't this the exact same thing guys like Adyen have been doing for several years? (https://support.adyen.com/index.php?_m=knowledgebase&_a=...) Or am I missing the point here?

alexchamberlain10• 14 years ago

Adyen don't look very professional.

sborsje3• 14 years ago

I agree that the site doesn't look great, but their platform works pretty good (well, apart from the abysmal SOAP API) and they offer support for lots of different payment methods (including direct debit, in lots of countries). So I truly don't understand why everybody is suddenly getting so excited about direct debit payments?

brador5• 14 years ago

Questions:

What shows on the bank statement?

Is collective payment taken once a month or on a per transaction?

When using a credit card, having a keylogger trojan on my comp is a minor deal. if I'm entering my bank details, it becomes huge. Am I covered?

The UK is one of the financial scam hotspots of the world. CS told a family member it's why BB left the UK. This after the family member had an order for £5,000 worth of iMacs cancelled repeatedly for no apparent reason (even after confirming three times with the CC company that the card was okay to go ahead).

I hope you're ready. There is a huge demand for a solid payment solution though, so if you hit it right, you're on to an easy exit.

Mvandenbergh• 14 years ago

You'd be covered by the direct debit guarantee scheme which, like credit cards, refunds any disputed transaction as soon as it's reported.

hirokitakeuchi9• 14 years ago

Hey Brador, I'm one of the founders at GoCardless.

Consumers are covered - Direct Debits come with a very strong consumer guarantee. You can find out more about it here: http://www.thesmartwaytopay.co.uk/directdebitexplained/pages...

nodata• 14 years ago

Brador, can you answer his other two questions?

jentulman2• 14 years ago

This looks like great news. Hirokitakeuchi could you describe what the payment flow would be like for me as a merchant if my customer has never encountered GoCardless before? Until you gain some traction I'm wondering where perceptions of trust on the part of my customer might be affected by their interactions with GoCardless during a payment.

[edited for grammar]

hirokitakeuchi9• 14 years ago

Your customer pays through our hosted checkout pages.

We have found that a combination of the Direct Debit branding and the merchant's branding help with customer trust.

jentulman2• 14 years ago

Thanks for your reply.

ashconnor• 14 years ago

Although I like the idea aslong as banks charge anything up to £40.00 for a failed direct debit I can't see it catching on. If there's not enough funds in Paypal it will just bounce the payment with no charge (providing you aren't funding your account with your bank account).

timthorn3• 14 years ago

Given that DD is a very well established service with high takeup, there is evidence that the UK population is happy to use it. However, there may be an issue with the public not trusting unknown companies to take payment this way.

rayhano• 14 years ago

Two questions:

1. How quickly is the money in the merchant account after the payment is authorised by the consumer?

2. Is the Faster Payments system now the new standard? If so, what is the difference between this and electronic Direct Debit and will you be porting onto Faster Payments?

3. What is next for GoCardless, apart from user (business) acquisition?

alexchamberlain10• 14 years ago

Faster payments are customer originated, whereas Direct Debits are merchant originated.

hirokitakeuchi9• 14 years ago

1. We pay out on a 7 days after a transaction is initiated.

2. Faster payments is the new standard for payments initiated from within a bank account (e.g., via online banking). Direct Debit is still the standard for "pull" based payments.

3. Keep an eye out. We have some big announcements coming up.

perino• 14 years ago

Besides the fact that a direct debit payment is reversible, isn't there also a timeout between the authorization and actual debit (in The Netherlands, I believe it's about 1-2 days)?

How do they handle chargebacks/failed payments and do they charge their merchants for failed payments/chargebacks?

I think direct debit could be huge on mobile, but given the fact that every direct debit payment can be cancelled within a month or so, how do you reduce your risks?

krmmalik• 14 years ago

I always love to see innovation in the payment space. In the grand scheme of things, there was very little innovation until PayPal arrived, but there has been very little innovation post-Paypal arrival as well (compared to improvements in other areas).

My biggest worry with something like this is that small companies in the financial space can be here one minute, and gone the next.

I wonder what these guys are doing to establish their credibility and safeguard their future prospects as well as for their customers.

casca• 14 years ago

This is a great product for the UK. Sadly, unless they get acquired quickly, they'll get destroyed by fraud. The Direct Debit Guarantee means that as the account-holder, I can tell the bank to give me my money back immediately, with no reason. So a fraudster will make some charges, run away with the money and GoCardless will be left holding the full liability.

This is one of the reasons that it's so painful to be allowed to process Direct Debit transactions in the UK.

JonM• 14 years ago

We've recently launched an Direct Debit facility and faced these exact problems. Luckily our DD provider works with some huge companies and so is already insured against any "indemnity claims". This insurance is reflected in our transaction fees though.

regularfry• 14 years ago

The fact that this now exists means a back-burner project of mine has gone overnight from "some day, maybe" to "GET IT BUILT ALREADY".

How long is the invitation-only period likely to last?

Direct Debit API for 1%; max £2

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