Is there a European consumer bank which lets you generate a virtual bank account number for direct debit mandates? https://www.accenture.com/t00010101T000000__w__/au-en/_acnmedia/PDF-29/Accenture-Payments-Virtual-Accounts.pdf …
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Funny how Fraunhofer identified the weaknesses of SEPA direct debit 7 years ago and nothing has improved: - Most of Europe uses the two-corner model (bad) - Netherlands is on three-corner (good) - Fraunhofer recommends four-corner (bad) http://publica.fraunhofer.de/eprints/urn_nbn_de_0011-n-2752628.pdf …pic.twitter.com/2FWbF2SUeH
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The three-corner model (through the debtor bank) is the best option here, because it guarantees validity of the direct debit mandate and does not rely on the debtor bank to initiate the validation process (step 4). The four-corner model adds too much friction.pic.twitter.com/TrDVIpPKjf
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Never quite realized how cheap SEPA direct debit transactions are: €2 per batch https://www.ing.nl/zakelijk/betalen/geld-ontvangen/incasso/ … If you have 2,000 subscribers for €15 per month, collection would cost you 0.007% of your revenue vs 3% for credit cards on a standard Stripe contract That’s 460x cheaper!pic.twitter.com/BSQTVZSeo3
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Replying to @thijsniks
I do not understand why Credit Cards exist or are a popular payment option.
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Replying to @michiels @thijsniks
Also pretty crazy that per-transaction list price of most PSPs for a SEPA transaction is about €0.15-€0.30. The profit they make!
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Replying to @michiels
Yes and no. This is definitely value-pricing, not cost-pricing. On the other hand, there are loads of costs a bank makes for which they don’t charge their customers directly so they have to make it up somewhere.
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Replying to @thijsniks @michiels
Ah wait, you didn't refer to bank fees but payment providers. Similar reasoning applies (something needs to pay for support tickets and the lawyers), but definitely still high margin.
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Replying to @thijsniks
Yep! I’m not complaining. Dealing with SEPA is a mess for PSP and high risks for the easy way consumers can just revert payments without questions asked. Still light years cheaper than any card payment out there with the fixed amount PLUS % cut.
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Replying to @michiels @thijsniks
Biggest problem in our business and for our customers is that SEPA is so extremely slow. Easily takes 5-10 days before getting a payment status back.
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Yup. I hope direct debits are moving to instant as well, but haven’t read anything about that yet. Though do you verify the account through iDeal? And how often do transactions fail after that?
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