How Using Direct Debit Payment Gateway Makes Your Business More Profitable

If you’re on the fence about incorporating a direct debit payment gateway solution to your business, you may be interested in knowing that offering direct debit as a payment option can increase your business’ profit.

Direct Debit Payment Gateway Enables Automated Payment

An increase in profit can come from increased revenue, or reduced cost. In this case, direct debit payment gateway’s capability to enable your business to set up automated payments means reduced cost for your business. 

After all, automating payment from your customers means you can spend less resources - including time and money - on manual invoicing, payment processing, and other related processes. 

Another advantage of being able to spend less resources due to the payment automation is the fact that now you have extra disposable resources, which you can invest or allocate to your business’ other components. 

For example, if you’re a landlord with 100 tenants, by incorporating a direct debit payment gateway to your business, your tenants’ bank will automatically send their rental fee to your account. 

Before your business has a direct debit payment gateway, you have to allocate a full-time staff to manually ensure all of your 100 tenants pay their rent in time. If that’s his sole job, and his wage is $5,000 per month, simply having a direct debit payment gateway means you can save up $5,000 per month. 

Alternatively, you can delegate your ex-rental collector staff to work in another position, such as analysing potential location and properties for your next investment. 

• If each of your tenants pays $1,500 per month, and your net profit is a third of their rental fee, you’ll have $1,500 x 100 people x 33.33% net profit = $50,000 revenue per month. 

• If you employ two staffs, each paid $5,000 per month - as you need 1 person to manage your property, and another to manage rent [turned into your future investment analyst because your business uses automated payment via direct debit payment gateway now] - then your monthly net profit is $50,000 - (2 people x $5,000) = $40,000

• If the property you’re planning to buy is a house in Geelong, the current price is $780,000. With a 30 years loan term and 5.69% interest rate, you’ll have to pay $4,522 per month. 

• Since you’re earning $40,000 monthly net profit, and assuming you’re allocating 12.5% of it for your new investment - which means 12.5% x $40,000 = $5,000, that means you can proceed with this plan.

• If you’re renting this new property to 6 people who pay $1,500 monthly rent per person, that means you’ll have an additional revenue of $9.000, which is almost 20% of your initial gross revenue.

That is a simple illustration of how having automated payment via direct debit payment gateway can increase your profit. Depending on the scale of your business and your business type, offering direct debit payment gateway to your customers can significantly escalate your business. 

Not to mention the benefit of having a predictable cash flow, reduced transaction cost due to direct debit payment gateway having a lower transaction fee compared to other payment processing methods, improved customer retention due to direct debit payment gateway being more convenient and hassle-free, and reduced payment errors which means saving your time and resources from correcting errors. 
If you’re interested in discussing further on how having a direct debit payment gateway can benefit your business, and how to set up a direct debit payment gateway for your business, reach out to our friendly team today.