One of the most common questions from our customers is about how payment timings work with their GoCardless integration. In this blog entry, we’re going to answer some of the most common questions in relation to payment timings and automated notifications sent by GoCardless.
One-off Payment Timings
So firstly, for one-off payments, when do you need to create a payment in GoCardless? If you already have a Direct Debit mandate set up with a customer, you’ll need to create a payment in GoCardless at least 3 working days before you would like your customer to be charged. If you're creating the payment on the same day that the Direct Debit mandate is set up, you’ll need to allow an extra day so you will need 4 working days to charge the payment. This gives GoCardless enough time to submit the payment instruction files to the bank and to the payment controller, BACS.
For example, if you’d like to charge your customers on a Wednesday, you’ll need to create the payment by Friday before the GoCardless deadline of 4pm. So, when do your customers get notified of their upcoming payment? Customers are notified 3 working days before their payment is collected. Because Direct Debit payments are initiated by a business or person which ‘pulls’ funds from the payer’s bank account, regulation in the UK says that the payer must be told in advance. Let’s say your customer is due to be charged on a Wednesday, that means they’ll be automatically notified by GoCardless 3 working days earlier, on the Friday.
When do you receive your Payout?
So, when do you receive your payouts from GoCardless? Well, you’ll see the money in your account 2 working days after your customer is charged. This allows time for the bank to tell GoCardless if the payment has been successfully collected from your customer’s account and for GoCardless to subsequently transfer the payout to you. If we stick to the same example as before: your customer has been charged on Wednesday, so assuming your payment goes through without any issues, you’ll receive your payout, 2 working days later, on Friday – between roughly 2 and 5pm.
Payment and Payout Timings Example (mandate already created)
- Friday: Create a payment in GoCardless before 4pm. Your customer will be notified on Friday too.
- Wednesday: After 3 working days, the funds are collected from your customer's account.
- Friday: 2 working days later on the Friday you will receive your payout from GoCardless.
Payment and Payout Timings Example (mandate NOT already created)
Friday: Create a mandate and payment in GoCardless before 4pm. Your customer will be notified on Friday too. Thursday: After 4 working days, the funds are collected from your customer's account. Monday: 2 working days later on the Monday you will receive your payout from GoCardless.
Subscription Payment Timings
Moving onto subscriptions, when do you need to create a payment in GoCardless? This is the same as with one-off payments so you’ll need to create the payment at least three working days before you would like the first payment to be charged. And again, if you're creating the payment on the same day that the Direct Debit mandate is set up, then you'll need 4 working days to charge the payment.
Now, when does your customer get notified? For subscriptions, your customer will be notified via email as soon as the subscription is set up. This will include when your first payment will be taken as well as the frequency of future payments and the duration of the subscription, where applicable. After this, they will only be notified if the subscription is updated, for example if the amount has changed, if the mandate has been cancelled or if the payment has failed.
And finally, when do I receive my payouts from GoCardless? Exactly the same as you would with a one-off payment. Your payouts will be in your account two working days after the payment has been collected from your customer. GoCardless always aims to make Direct Debit payments as quick as possible, given the rules set by BACS.
What notifications will your customers receive from GoCardless?
If you're collecting payments through the Direct Debit system in the UK, BACS rules require that you to send out certain notifications to your customers. Fortunately, GoCardless takes care of these notifications for you and will send we send fully BACS compliant emails to your customers on your behalf.
Broadly speaking there are two categories of emails that your customers will receive. These are mandate set up emails and payment notification emails which are also called advance notice emails.
Mandate setup emails
These emails are fairly self explanatory; GoCardless will send an email to your customer when they authorise a new Direct Debit mandate. This email will be sent soon after the customer completes the payment pages on the GoCardless website or on your website if you have integrated the GoCardless payment pages directly into your website. In the rare event that the customer's mandate fails to be set up correctly GoCardless will send an email to the customer notifying them of this too.
Payment notification emails
For one-off payments GoCardless will send a notification to your customers three working days before they're due to be charged. So for example if a customer is due to be charged on Wednesday then GoCardless will send a notification to the customer three working days before that, on the previous Friday. For subscriptions, GoCardless will send a notification to your customer in each of the following scenarios:
- As soon as they are added to a new subscription
- As soon as they are added to a plan
- Or if the subscription that they're currently on is changed (for example, if the subscription amount or frequency are changed)
If you have created a recurring monthly payment, customers will not receive a notification that the money is being collected 3 days before each month for second and subsequent payments (only for the first payment).
Also, if a future payment that is due to be collected from a customer is now no longer going to happen, GoCardless will send a notification to the customer informing them of this. This could be the case if either the payment or the mandate for the customer has been cancelled. If a payment that is due to be collected from a customer subsequently fails to be collected successfully, GoCardless will also notify the customer of this. That's all of the types of notifications that GoCardless will send to your customers.
So to sum up, your customers will be notified when
- the Direct Debit mandate is set up
- a subscription is created for them or the current one they're on is changed
- their payment or mandate is cancelled
- their payment or mandate fails
- and also three working days before any one-off payments are due to be charged.
These are the default emails that GoCardless sends to your customers. If you're on the GoCardless Pro package you can send your own custom notifications instead of these GoCardless branded and worded emails, if you would prefer to, these can also be sent by post, text or email and could be branded with your style to create a more consistent experience for your customers depending on what works best for your business and customers.
That's all for this blog entry. If you have any questions that you would like answered about how GoCardless or our service work, please don't hesitate to ask!