How direct debit is simplifying payment collection!

Getting paid is an integral aspect of any lending business, yet the path to successful transactions is often riddled with many obstacles including but not limited to credit cards fail, customers changing their cards etc. These unforeseen challenges can throw a wrench into even the most carefully orchestrated repayment plans. They not only pose a threat to your lending business but also jeopardize your borrower’s credit history.

We know about these problems and we’ve fixed them – with Direct Debit, simplifying payment collection.

Imagine this scenario: a borrower eagerly awaits their repayment date, only to have their credit card transaction fail, causing frustration and panic due to a looming penalty fee. Such avoidable mishaps can tarnish both the borrower’s financial well-being and the lender’s reputation. This is where direct debit steps in as a reliable and efficient alternative, eradicating the stress and uncertainty associated with other payment methods. 

With direct debit payment, borrowers and lenders stand to reap significant benefits, ushering in a new era of seamless transactions. Lenders no longer have to rely on just cards to recover their money from customers. Borrowers in the long run enjoy the benefits of lower interest rates because of the convenience and reliability of payments.

Why Direct Debit?

Compatibility: Direct debit is designed to be compatible with various bank accounts, ensuring that a wide range of your customers can utilize this method without hindrance.

Universal acceptance: Regardless of the bank or financial institution, direct debit boasts of a versatile and accessible choice for all parties involved.

Long-lasting validity: Unlike traditional credit or debit cards that may expire or require constant updates, direct debit mandates possess enduring validity, reducing the need for frequent updates.

Enhanced security: Direct debit eliminates the risk of cards being lost, stolen, or compromised, increasing the overall security of transactions.

Efficiency: Quick debit and partial debit options alleviate the stress associated with managing repayments, sparing both lenders and borrowers from the cumbersome process of chasing overdue payments and incurring penalties.

Inclusivity: Direct debit is available to all customers, fostering a sense of inclusivity and fairness within the lending ecosystem. No one gets left behind with direct debit.

How does direct debit work?

The process is straightforward:

Obtain authorization: Your borrowers grant you permission to take payments directly from their bank account through a direct debit mandate. The mandate outlines essential details such as bank account information, payment frequency, and amounts. 

Initiate debit requests: On the agreed-upon dates, Lendsqr initiates debit requests based on authorized mandates. Borrowers’ banks receive these requests, signaling the initiation of the payment process. Lendsqr credits its bank account with the collected funds from your customers. We reconcile the incoming transactions with the respective mandates and lenders(your) account. Both banks keep a record of the transaction.

Communication: Your customers receive timely notifications regarding the status of their debits. This includes successful transactions, failed attempts, refunds, and other relevant information.

24/7 support: Best part of all, you won’t have to figure it out on your own. Our dedicated customer support team will always be available to address inquiries, concerns, and disputes related to direct debit transactions.

Featured article: Learn more on how direct debit works.

Here’s the good news!

Direct debit is simplifying payment collection and is now available to lenders within the Lendsqr ecosystem. Embracing this groundbreaking method promises you a lending future where the challenges of repayment become a thing of the past, replaced by a secure and inclusive process that benefits everyone involved. 

To explore this new feature further, sign up on Lendsqr and contact our Support Team to begin your journey towards simplified payments.

Already a lender on Lendsqr? Learn how to activate direct debit as a repayment method on Lendsqr.