The holy grail of the 21st century is saving time. Why? Because, as they say, time is money. Life is too short to spend time on things that are a drag. Like sorting socks.
Pre-authorized debits are the time-saving way to collect recurring payments. But are they the right solution for your business? Read below to find out!
The Truth About Pre-Authorized Debits
It would raise eyebrows for me to say that pre-authorized debits are the solution for your payment collection, no matter who you are. After all, I work at a company that offers pre-authorized debit processing.
So here's the (actual) truth: pre-authorized debits are not the best solution for everyone. Don't trust any payment-processor who tells you differently.
The best way to start, is to tell you what isn't a good fit for pre-authorized debits:
If you collect mostly one-time payments, like a retail store would, then pre-authorized debits are not a great fit. In those instances, cash or cards work better. Why? Because pre-authorized debits don't excel at handling one-off payments, like buying a pair of shoes for instance. Sure, they will technically work for that, but it's like using a sledgehammer to put up a picture. It can do it, but there are better ways.
Pre-authorized debits are best suited to businesses or individuals that collect on-going payments. For instance, if you sold a $5,000 pair of shoes and your customer needed to pay you in $250 installments, then pre-authorized debits would work great!
Gym memberships, subscription fees, payment plans, and service fees are also some examples of payments that work excellent with pre-authorized debits. Essentially, if you have payments that you collect regularly from your customers, then pre-authorized debits might be perfect for you
But Are They (Really) The Right Fit For Me?
For most businesses and solopreneurs that need to collect recurring payments, pre-authorized debits are a great fit. They offer a secure, simple way that's easier and faster then credit cards, cash, or cheques. Like all things, however, there are exceptions.
I just can't tell you what those exceptions are.
That's because each business is unique. I'd love to be able to hand you the one-size-fits-all advice, but that doesn't exist. (If I did know it, I'd be fabulously wealthy and sipping a cool beverage from a coconut on a sunny beach.)
The best way to find out if pre-authorized debits are a good fit for your needs? Ask! Get in contact with payment-processors, and explain your situation. Most will be more than happy to help you out.
Wrapping It Up
Pre-authorized debits may be just what you need to save time and effort in your business. Or, they could be the wrong fit. Since I have yet to perfect my psychic powers, I can't give you a 100%-oh-yes-it'll-work-awesome answer in a blog post.
The easiest way to know if pre-authorized debits will work for you, is to ask! Feel free to drop us a line here and let us know what your collection needs are. We'll be more than happy to answer them - no sales pitches, no obligations. We promise!