When you’re in a startup it’s very easy to get caught up in the thick of things – making time fly by so quickly and things easy to forget.
This time last year we introduced Elektronisches Lastschriftverfahren (ELV) as a new local payment method for Germany. ELV is essentially direct debit, whereby merchants directly pull funds from a customer’s bank account. And with credit card penetration at 30% – direct debit is one of Germany’s most popular means of payment.
SEPA Direct Debit
On March 31st 2012, The Single European Payments Area (SEPA) regulation (EC 260/2012) was adopted to unify national payment methods to a European standard.
At its core is the consistent use of an international bank account number (IBAN) and bank identifier code (BIC). With the main advantages of making bank transfers and direct debits easier, faster and cheaper throughout Europe.
Benefits of Direct Debit
For online businesses, this means being able to accept payments from all SEPA countries. Which allows them to capture more of the e-commerce market by attracting customers who don’t own a credit card.
But this also means they can handle all euro payments from a single bank account, instead of having to set up bank accounts in different euro area countries.
However one of the main benefits our users highlight, is how the fast settlement improves their cash flow and reduces their financing costs. Since the funds are withdrawn directly from the customer’s bank account, the delay is only the time it takes for the bank to transfer the money to your account.
When it comes to fraud prevention, as risk analysis is done in real-time to ensure the bank details are valid and that the account does not have a history of suspicious behaviour.
Currently we offer both SEPA Direct Debit and the German ELV. As you can see with the payment form below, you adapt it to accept credit cards, ELV and SEPA payments. Enabling online businesses to give customers the opportunity to choose their preferred method of payment.
At the moment, we have SEPA Direct Debit available for merchants with a German bank account. However we’re working relentlessly to making available across Europe to achieve our mission of delivering the easiest payment experience for European businesses.
It’s been one whole year since we launched direct debit as a payment method for PAYMILL users. And with SEPA Direct Debit, we want to make it available for all of Europe in 2015.