Direct response television can be a great way for businesses to win new customers or nonprofits to raise funds, and it's important to realize that direct debit transactions are an integral part to DRTV's success. Tobin Aldrich had an article published in the International Journal of Nonprofit and Voluntary Sector Marketing that stated since the introduction of direct debit in 1999, nonprofits have seen a dramatic increase in the amount of money coming in due to DRTV. Aldrich reported that before direct debit around 40 percent of pledge responses could not be converted due to the payment processes in place at the time. After the induction of the technology, that was reduced by 80 to 85 percent, proving the importance of direct debit.
How direct debit works
Direct debit requires the bank account information from customers. This data can be acquired via mail, Internet, telephone or fax. Once collected, the information is submitted to the bank or payment processor, and that entity collects the payment on behalf of their client. In most countries, a direct debit mandate or permission must be printed and included with the order form or invoice. The authorization format is determined by the country where the transaction occurred.
Offering direct debit is smart for DRTV because customers may make their purchase in different ways. Some call in, others choose to go online and still many choose a different option if it's available to them. Direct debit provides all customers with a quick, efficient and safe way of making a payment.
Because direct debit transactions can be made in a number of different ways, it's important to have a payment processing company that can handle the payments. The company should be able to handle all of the different kinds of direct debit payments as well as credit and debit card payments. Also, ensure it can handle large volumes of payments at once. DRTV advertising campaigns can drive a lot of sales quickly, so it's helpful to have a payment processor with the capabilities to handle payments efficiently, so no payments are turned away due to technical difficulties.
Occasionally, a payee may want to question a payment made as the result of a DRTV campaign. It's important to have detailed records of every payment so if a bank has issues or questions about a transaction, it can be easily proven. Keeping these records is highly important. The duration that these records need to be stored can vary depending on what country business was conducted in, so make sure to check before deleting any data. Because of the nature of DRTV campaigns, many payments can be made at once. Ensure that the payment processing company has data collection and record keeping measures in place for all transactions. At the end of the campaign, make sure a copy of the records is provided and the processing company is not relied on to keep records.
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