Insurers, telecom companies and utility companies all face the same challenge: collecting money from thousands of customers – or even millions – every month. Usually, this is done through a standing direct debit order that ensures hassle-free money transfer every month.
But there is always the risk that your direct debit order is processed just as your customer has no funds, or that he or she does a reverse payment. Executing the direct debit again is costly, and cancelling the direct debit and forcing the customer to do a bank transfer means waiting even longer for your money. Through open banking, there are two alternatives.
- A recurring PIS order. Payment Initiation Services (PIS) allows you to initiate a recurring bank transfer or standing order on behalf of your customers, to be processed on the day your customer chooses – for instance, a day or two after payday. The customer only has to confirm the payment, for an experience that’s equally as hassle-free as a regular standing debit order.
- AIS + PIS. For customers with irregular paydays, a combination of Account Information Services (AIS) and PIS might be the better fit. With AIS, customers can grant you access to their transaction data and bank balance. Then, you simply initiate the payment through PIS when their available funds rise above a certain threshold each month. AIS requests re-authorisation every 3 months, so customers know they are always in control.