The Future of Banking: An Interview with GoCardless
Could you tell us a little about how GoCardless works?
GoCardless began when its founders saw an opportunity to improve the existing bank-to-bank payments system, Direct Debit. Although a highly trusted payment method, Direct Debit was slow, difficult to access, difficult to use and reliant on inefficient legacy systems. Thanks to technology, GoCardless brought Direct Debit into the digital age and is making payments work better for all businesses, from sole traders and startups to large corporations such as Thomas Cook and the Financial Times.
Taking payments with GoCardless has many benefits, from simple online setup to fully flexible payment integrations with leading cloud accounting and billing platforms. At present, GoCardless serves more than 20,000 businesses across the UK and Europe, with further growth planned.
Where did the initial idea behind GoCardless come from?
GoCardless started life as GroupPay, originally created to help small organisations, such as sports clubs, collect payments more effectively. Managing money in these situations could often be troublesome, due to the need for manual admin, chasing up late payments, expensive and complicated fees, among others. The GoCardless founders recognised an opportunity to address the issue by building a useful solution that saved on manual admin and transaction fees. In the process, the founders discovered that the UK’s traditional Direct Debit system was clunky and inefficient. They quickly realised that they could also use the GoCardless technology to make payments work better for large businesses. So they decided to focus on the best solution - improving bank-to-bank Direct Debit payments for everyone.
Over 20,000 companies use GoCardless, and you now process over £1.5 billion payments per year. What is your vision for the future of GoCardless?
In the future, we aim to continue our strong growth both domestically and across European markets, while offering a premium Direct Debit solution for all our customers. Our vision is to make payments one less barrier to doing business, with anyone, anywhere in the world.
There are an ever increasing number of Financial Technologies emerging. What sets GoCardless apart from other innovators in the banking and financial industry?
GoCardless has revolutionised Direct Debit by taking it into the digital age for companies of all sizes, from freelancers to multi-nationals. We achieved this through the use of advanced technology, with our API at the core. The API allows for easy integration of the GoCardless system and is highly flexible. Customers can use GoCardless to access Direct Debit in a number of ways, according whatever best suits their business needs.
This could mean using our dashboard directly, via one of the GoCardless partner integrations such as Xero, QuickBooks and Zuora, or by integrating the technology into their own applications. GoCardless partnerships include integrations with all of the leading cloud accounting and billing software, as well as more industry-specific partnerships. This allows businesses to streamline their processes and manage all billing and payments from within one system. At present, our API powers Direct Debit payments for major companies like the Financial Times, Thomas Cook and Nutmeg.
Where do you see the future of banking and finance, and where do you see GoCardless within that future?
A significant change for the banks is coming up in the near future with the introduction of second European Payment Services Directive (PSD2). This represents a major opportunity for GoCardless and fintech in general. PSD2 will offer significant benefits for consumers, opening up the financial ecosystem to fast and nimble new players, by compelling the banks to grant access to currently stored customer information, which is rarely given out at present. In the future, banks will need to adapt to create solutions to fulfil this new requirement, including creating APIs to handle the processes.
Consumers are being given greater control over their data and who they would like to share it with. PSD2 is one part of that. This move will likely result in more tailored financial products, as well as partnerships between e-commerce and fintech firms, which can create specialised offers based on consumer preferences.
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"The Future of Banking: An Interview with GoCardless" First published on Company Connecting December 2016