Pinch - Claw Street Journal (the pinch blog)

Pinch - How to Get Customers to Commit to Pre-Approved Direct Debit

Written by Joe McCord | Dec 14, 2022 12:11:16 AM

But how do you persuade your existing customer base to change the way they pay you without upsetting them too much, or losing customers outright? This article gets to the heart of what causes this aversion to change and how to push through and get your customers paying you the way that most benefits you.

Reasons a Customer May Not Want Direct Debit

In order to persuade someone who has a preconception that's negative, you first must understand their perspective. Without understanding why a customer would not want to pay via direct debit, you won’t be able to directly address the concerns and mitigate them, so any potential benefit they might gain is an afterthought. Below are the main reasons a customer might not wish to pre-approve your business for direct debits.

  • They may not be very solvent financially - If a customer is not flush with money they may simply not want to give you permission to debit them and cause them to become overdrawn or have the payment fail. This is probably the hardest thing to work around, but given you can set pre-approval limits inside of Pinch, you can often still get customers like this to agree to have smaller less concerning amounts debited.. 
  • Security concerns - If a customer is particularly worried about their information security it’s important to let them know that Pinch has bank grade security and storing their card or bank details inside of Pinch is encrypted and as such, very secure.
  • Laziness or aversion to change - Frankly, this is the main reason. Customers that are used to paying a certain way and see no issue with it will often simply decline unless there is something that causes them to recognise the benefit of doing so. 
  • They simply don’t trust you enough - Perhaps you are a brand new business, or they are a new customer of yours with some bad experiences behind them. Giving direct debit authority to a company does require at least some modicum of trust from the customer. Offsetting concerns about your credibility can be a really effective way to go about getting more customers on direct debit.

While it’s important to recognise the reasons why, you do not want to have to be having these conversations one to one all the time, so it is important to have a plan for how to communicate to your customers not just individually, but en masse.

The Pinch Method to Getting Pre-Approvals Over the Line

In Pinch you are able to select specific customers that you wish to invite to pre-approval. These customers will be sent a templated email from Pinch itself inviting them to submit their details. If this request is sent without any prompting ahead of time, the take-up rate is very low. So it’s important to inform your customers ahead of time, tell them why it's occurring and help them understand that you know how they feel but it'll be okay anyway. 


Taking what we know about the reasons why customers might not like to sign up to pre-approved direct debit, here is an example email communication you may wish to use to help your customer base overcome their aversion to change.

Email Template for Mass Sending to a List of Existing Customers

Hello [customer name],

Thank you for being a valued customer of [company name]

As we have grown over the [years/months] we have had to spend a growing amount of time on managing our invoicing and following up on payments, which is why we have introduced a new payment solution that allows our customers to automate the payment of their [pool maintenance/web hosting/bookkeeping expenses etc].

We understand that direct debit can be a little scary but we have been testing it with a small portion of our customers and the results so far have been amazing. Please also rest assured that our payments partner Pinch is bank level secure and Australian owned and operated. They promise to keep your data safe and secure. To provide an additional layer of comfort we can also set limits on the amounts we can direct debit from you upon request.

Of course, this doesn’t just benefit us, it benefits you as well. You will no longer have to worry about manually handling payment for the essential service that we provide. You won’t get any awkward phone calls about payments. Everything gets taken care of automatically.

Rest assured this will change nothing about the way we deliver your service. You will continue to receive the same excellent service from us with even less manual handling on both sides. So it’s win/win really!

To opt in to our new direct debit service please keep an eye out for the approval email that will be heading your way shortly. Should you have any questions please don’t hesitate to get in contact with us.

Best wishes,

[Business Owner]

Email Template for New Customers

Hello [customer name],

Welcome to [company name]

This email is to give you some further information about how to make payment to [company name]. Our preferred payment method is through direct debit, using our partner Pinch Payments. By agreeing to direct debit you are helping us focus more on the delivery of service than the administration of accounts so we thank you in advance for choosing this option.

Please rest assured that with our payments partner Pinch is bank level secure and Australian owned and operated. They promise to keep your data safe and secure. To provide an additional layer of comfort we can also set limits on the amounts we can direct debit from you upon request.

Of course, this doesn’t just benefit us, it benefits you as well. You won't have to worry about manually handling payment for the essential service that we provide. You won’t get any awkward phone calls about payments. Everything gets taken care of automatically.

To opt in to our new direct debit service please keep an eye out for the approval email that will be heading your way shortly. Should you have any questions please don’t hesitate to get in contact with us.

Best wishes,

[Business Owner]

Variable Recurring Payments

If you run a business that does repeat servicing that varies in cost (such as a gardener, pool cleaner or even website support team) it is also worth mentioning to the customer in the aforementioned communication that the payment amount may vary depending on the requirement.

Pinch is the perfect solution for companies that do have to handle variable recurring payments. You can read more about that here

Next Step - Sending the Pre-Approval Authorisation Request

Once you have sent the above communication out, it is a good idea to follow up with the actual request promptly, so that it is fresh in mind. Try not to delay more than 1 hour with the authorisation request.

In Pinch there are a couple of ways to do this. Far and away the most effective way is to navigate to your customers list and click manage pre-approvals. From here you can filter your customers down to those you wish to email, or you can send it to all of them.

The other way is through a link that allows the customer to self opt in which can be found in your config section. Beware that with this feature it will treat the customer like a new one and double up on records in both Xero and in Pinch so unless you have a good reason to use this one, I’d stick to the former. 

Be Persistent

Getting everyone on direct debit can be hard, but it is so worth it. Don't give up just because a couple of your customers don't seem to be keen. The pay off is massive.

Also be mindful that promotional and transactional emails often get filtered out or just plain ignored. It doesn’t always mean your customer won’t agree to direct debit, if they don’t do it on first look.

Below are a couple of simple hacks to help you gradually grow your direct debit customer base.

  1.  Our customer portal functionality allows customers to opt themselves in for direct debit. This won’t happen often, but it’s a fantastic bonus when it does. The customer portal does a load of other things too, and is something that every customer can self opt into if you use the Pinch invoice issued email for sending your customers their invoice notifications.
  2. When launching the pay now page yourself from the invoice screen from your Pinch account, you can collect the payment over the phone. At the same time, you can ask the customer if they are okay to opt in to recurring auto-debit and check a simple box right there in front of you. 

These two simple hacks can massively increase your rate of customers on direct debit.

Don't Be Afraid to Push the Issue

At the end of the day nothing replaces straight up asking. It can be an awkward conversation to have but with some persistence, commitment and persuasiveness you can reap the benefits of having your customers on direct debit too. The benefits of insisting here almost always far outweigh any downside and it's not too unlikely that the customers you have that aren't keen are ones you might be better off without anyway.