Features
- ✓SEPA Direct Debit
- ✓Recurring payments
- ✓Payment retries
- ✓Bank-to-bank
Pros
- Lower fees than cards
- Great for subscriptions
- Less churn
Cons
- Slower than cards
- Customer setup required
Integrations
Connection Types
1 known connections
Best For
About GoCardless
GoCardless specializes in bank-to-bank payments through direct debit, offering a fundamentally different approach than card-based payment processors. For German businesses with recurring revenue models—subscriptions, memberships, retainers, or installment payments—SEPA Direct Debit through GoCardless offers significant advantages over card payments. The fees are typically lower (1-2% versus 1.5-3% for cards), and the payment method is inherently sticky—customers don't need to update payment details when cards expire, reducing involuntary churn. The payment experience is simple: customers provide bank details once, and subsequent charges are automatic. GoCardless handles the SEPA mandate management, payment collection, and reconciliation, integrating with accounting and CRM systems. The platform also offers bank payment links for one-time payments, useful for invoices or large transactions where card fees would be substantial. The trade-off is timing—direct debit takes 3-5 business days to clear versus instant card authorizations. For subscription businesses optimizing for retention and payment costs rather than immediate confirmation, GoCardless offers a compelling alternative to card-based billing.
SEPA Direct Debit Pricing
- 1-2% transaction fee plus €0.20 per payment
- Lower fees than credit card processing
- Volume discounts available for high-volume merchants
- Transparent fee structure with no hidden charges
- Monthly billing with straightforward invoicing
SEPA Direct Debit Fundamentals
SEPA Direct Debit (Lastschrift) is a bank-to-bank payment method where customers authorize recurring charges against their bank account, rather than providing card details. Once a customer signs a SEPA mandate (handled entirely by GoCardless), you can charge their account automatically. The key difference from credit cards: it uses the customer's bank account directly, making it more like a check authorization than a card transaction. For German customers, this is a familiar and trusted payment method, often considered more secure than sharing card details.
Recurring Payment Features
- One-time customer mandate setup, then automatic recurring charges
- Payment retries for failed transactions with configurable retry schedules
- Webhook notifications for payment status updates
- Multi-currency support for European businesses
- Reconciliation tools and detailed reporting
Churn Reduction vs. Card Payments
A major advantage of SEPA Direct Debit over cards: involuntary churn is dramatically lower. With credit cards, approximately 2-3% of active subscriptions fail monthly due to expired cards. Customers must update card details, causing many to abandon renewal. With direct debit, customers' bank mandates remain valid indefinitely—there's no expiration date. This alone can reduce churn by 25-30% for subscription businesses, directly improving lifetime value and reducing the marketing cost of acquiring replacement customers.
Comparison with Stripe & PayPal
While Stripe and PayPal focus on card payments with Stripe also offering banking integrations, GoCardless is the specialist in SEPA Direct Debit. Stripe charges 1.5-3% for card payments plus fixed fees, while GoCardless charges 1-2% for direct debit. For subscription businesses, the combination of lower fees and lower involuntary churn makes GoCardless more cost-effective. PayPal's offerings are less specialized in direct debit. GoCardless is purpose-built for subscription billing, particularly in Europe, while Stripe is a generalist payment platform.
Integration with Accounting & CRM
- Xero integration for automatic invoice matching
- QuickBooks sync for accounting records
- Salesforce integration for subscription management
- Stripe compatibility for hybrid payment methods
- Webhook-based integrations for custom workflows
Related Articles
Reviews (0)
Information on this page is sourced from publicly available data (official websites, pricing pages). Prices and features may change. We do not guarantee the accuracy or completeness of the information.
Our editorial ratings are created to the best of our knowledge and belief. Are you the owner or provider of this app and noticed that data is incorrect or outdated? Please reach out – we will update the information promptly.
Found an error? Contact us