Direct Debit

Payments via Direct Debit are supported by BitFolk through the payment provider GoCardless.

What

Direct Debit is a broad name for any payment method whereby a payee (e.g., BitFolk) can request a direct transfer of funds from the bank account of a payer (e.g., you). In the United Kingdom, Direct Debit is the name of a specific banking feature and that's what this article is about.

BitFolk is using the third party GoCardless as a service provider to carry out the transactions on its behalf, in a similar way to how Paypal or Google Wallet may be used.

Who can use it

Requirements for using Direct Debit as a payment method to BitFolk:

• You must hold a UK bank account denominated in British Pounds (£)
• Your bank account must be enabled for Direct Debits by your bank (most current accounts are)
• You must be willing to set up an account with GoCardless

Additionally if you want to be able to set up new payments online you'll need to have sole authority to do so. Some bank accounts in multiple names require multiple authorisations, which can currently only be done by posting a paper form to your bank.

Why you might want to use Direct Debit to pay BitFolk

• Your payments will be automated.

You'll follow a link to GoCardless from your BitFolk Panel account to authorise a payment of a certain amount per month, quarter or year (depending on your contract length). After you complete this simple process, BitFolk will be able to withdraw up to the amount you authorised each period, without you needing to take any further action.

• Your account credit will be put to use sooner.

Since you will be authorising BitFolk to take up to a certain amount per period, BitFolk will only request the exact invoice amount.

At the moment customers paying with a standing order or PayPal subscription send BitFolk a fixed amount each period, which means that those of you who regularly accumulate service credit through referrals never get to use that credit.

• Direct Debit offers you great peace of mind.

The UK's Direct Debit guarantee is one of the strongest in the world. If for some reason BitFolk should become uncontactable, customers can always cancel Direct Debit instructions and reverse Debits that have already gone out, just by talking to their bank.

• No more PayPal (or Google Wallet).

Some people dislike using PayPal or Google Wallet.

Why BitFolk wants you to use Direct Debit if possible

• It's a lot cheaper than PayPal or Google Wallet.

On a typical £10.79 per month transaction Google charges £0.57 in fees. PayPal charges £0.51 in fees. GoCardless charges £0.11. At the moment BitFolk eats all the transaction fees, so would really prefer them to be as small as possible.

• GoCardless are easy to work with, and are based locally (London).

Their API is actually quite nice to use and they are very responsive to support queries and suggestions. Unlike PayPal which are almost entirely useless unless you like being told to clear your cookies in response to almost every single query.

• The customer can't stop paying without cancelling their Direct Debit

This will avoid the situation where a customer stops responding to all contact leaving BitFolk unsure whether to suspend their service.

• Paying for upgrades will be simpler.

At the moment when a customer upgrades their service they usually end up having to make a small one-off payment for the pro rata price difference between their old service and their new one, as well as sort out the new recurring payment (change standing order or set up new PayPal subscription).

Using GoCardless, BitFolk will cancel your existing pre-authorisation for you and send a link to set up a new one. BitFolk will then be able to request the pro rata payment without you having to take any action.

Current status

Now implemented and pushed live:

• Payment of a one-off invoice or bundle of invoices
• Setting up a pre-authorisation

It hasn't been tested very much with live transactions yet.

There isn't really anything else left to implement, except perhaps the ability to cancel the pre-auth from the Panel site. Pre-auths can always be cancelled by the customer from their GoCardless account though, so no real rush for that.

How to switch

You can set up a pre-auth from your Panel account. If you already have a PayPal subscription then it won't let you do that until BitFolk have cancelled that for you, so ask support in that case.

Frequently asked questions

What will appear on my bank statements?

You'll see GoCardless and a reference number.

If I allow BitFolk to take Direct Debits from my bank account, what stops you emptying my account and flying to Bermuda?

Ultimately the Direct Debit guarantee means that if you tell your bank that a payment was not authorised, they give you your money back immediately.

Practically speaking, GoCardless makes clear what any request will do. Each request will either be:

• A pre-authorisation for a maximum of a certain amount per month / quarter / year;
• A subscription for a fixed amount every month / quarter / year, or;
• A one-off request for a fixed amount.

It should not be possible for BitFolk to operate outside of those restrictions.

In addition, GoCardless hold funds for a week before passing them on to BitFolk.

Why doesn't BitFolk do Direct Debit by itself without GoCardless being involved?

BitFolk's bank (Barclays) are not interested in enabling this because they say BitFolk is too small. A few different third party Direct Debit providers have been looked at, and GoCardless seems to be the nicest one around at the moment.

What information will GoCardless want from me?

They will need to know:

• Your name.
• An email address (to which they will only send notifications about your payments).
• Your bank account's sort code and account number.
• The postal address you gave to your bank.

What information does GoCardless share with BitFolk?

Obviously apart from all the details of your payments to BitFolk, BitFolk is provided with your name and email address. BitFolk does not get your bank details.

Why not just implement a credit card gateway that allows continuous authority?

This will be done eventually, but most BitFolk customers do have a UK bank account and Direct Debit is superior to credit card continuous authority. Credit card processing is quite expensive and continuous authority isn't very consumer-friendly.

BitFolk has made a mistake with a Direct Debit. Who do I talk to?

Please talk to BitFolk first. You most likely only need to contact GoCardless or your bank in an emergency.