GoCardless, the direct debit payment company based in London, is now offering its payments solution to U.S. customers. The company also opened a San Francisco office this summer to spearhead its U.S. expansion efforts.
The U.S. launch opens up a sizeable swath of new business for GoCardless. The company’s business clients can offer their customers the ability to set up recurring payments directly from their bank accounts, eliminating the need for paper checks.
According to Pranav Sood, vice president of international expansion at GoCardless, the U.S. launch is a critical step in the company’s plans to scale globally. “From a consumer perspective, if you’re offering something that people are asking for, you are going to increase your conversion overall,” Sood said. “When you look at the business view, we actually see the data showing that business payers want to use ACH and direct debit.”
According to the 2019 AFP Electronic Payments Survey Report, 42% of business-to-business payments still are done using paper check, which Sood said puts GoCardless in a position to earn business. He admitted that customer acquisition is a tall order in a country where people widely use credit cards for recurring payments. The business-to-business payments space in the U.S. also has spawned other companies seeking to digitize transactions previously only handled by check, including Bento for Business. Despite these challenges, the company believes it has good prospects to acquire U.S. customers.
For merchants offering GoCardless, the payment option will appear at checkout next to traditional options like cards and PayPal. Merchants also can send links through email or invoices to consumers and businesses for one-time payments. GoCardless’ platform works with traditional billing software like QuickBooks and Salesforce.
GoCardless pitches its prices relative to card interchange fees. GoCardless charges 1% per transaction, and transactions are capped at £2 ($2.50). Interchange fees, meanwhile, often run as high as 2.7%. Sood said the company is spreading the word to merchants about its U.S. launch through phone calls, emails and even site visits.
GoCardless was founded in 2011 and has raised more than $122 million in total. The company offers direct debit payment options in more than 30 countries, including the U.K., Canada and Australia in addition to the U.S., which account for about 70% of global recurring payment volume. According to a company statement, GoCardless works with more than 40,000 businesses around the world, and the company processes $10 billion in payments each year.
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