Direct payment transfer

[Dizzydiza]

Not sure if that is what you call it. I have a customer who says that they can pay me via paypal as they don't have a paypal account but I thought you didn't need a paypal account to make a payment. Any way she has ask to pay direct into my bank account. Do I just give her my sort code and account number and is this a safe way of taking payment?
Thank you in advance for your advice.
Diana

 

[Brian McIntosh]

Hi Diana,

I normally put the sort code and bank account details on each invoice I send out. Never had any problems with it yet.

 

[iain_darkflare]

I take most of my payments this way. All your customer will need is the sort code and account number. They should be able to transfer it by using the "make a payment" option within their internet banking, or over telephone banking, depending on who you are with, and providing they are with Santander, you should receive the money within a few hours, maximum 3 working days (I think).

You are correct thought, you don't need to have a Paypal account to make a payment to someone with one. You can just enter credit/debit card details and pay that way. If required you can generate an invoce from paypal that will be sent to their email address that will allow them to make the payment.

However I would opt for the bank transfer, it goes straight to your account, and you shouldn't have to apy any fees on it, unlike paypal.

Hope this helps,
Iain.

 

[Dizzydiza]

Thank you both for your replies they have come in a very timely manner as I have 2 different customers who are ordering my most expensive tiara. Woohoo! It would certainly make sense to use the direct transfer option as the paypal fees make quite an impact on my profit.
Thanks again
Di x

 

[Mike Lewis]

Paying by direct bank transfer is completely normal. Most medium and large companies now use it as their main method of paying suppliers. Often, your customer will ask you for your bank details the first time they receive an invoice from you. Printing the details on your invoice will save time.

I've never heard of anyone paying by PayPal for a normal commercial transaction (as opposed to buying something on-line, or when a private individual wants to pay another private individual). If you were to use it, you would have to increase your prices in order to cover the PayPal commission.

Mike

 

[iain_darkflare]

Glad to help Diana.

I agree with Mike, I have in the past (with only a few exceptions) had to add on a small fee for those choosing to pay for any design services via PayPal.

However I also sell some of my own art online, and just use PayPal buttons for those, and expect to take the hit with fees for those...but that is retail. I don't sell enough to justify a merchant account.

 

[Merchant UK]

Paying by direct bank transfer is completely normal. Most medium and large companies now use it as their main method of paying suppliers. Often, your customer will ask you for your bank details the first time they receive an invoice from you. Printing the details on your invoice will save time.

I've never heard of anyone paying by PayPal for a normal commercial transaction (as opposed to buying something on-line, or when a private individual wants to pay another private individual). If you were to use it, you would have to increase your prices in order to cover the PayPal commission.

Mike

I too agree with mike, When i started using RSB Worldpay i got rid of paypal completely, Paypal is easy for when your starting but when you start taking large orders (mine where in excess of £500+) then paypal is a hell of an expensive way of doing it, not to mention that paypal have the right to freeze, refund and deduct from your bank account at will. To me those risks where too costly.

You want to promote the fact that you will accept bank transfers for payments, as already meantioned, add your Sort code and account number to each invoice and you'll be suprised just how many people will chose to pay this way.

As for paypal stick a handling charge to cover the fee's, whislt paypal is lovely for selling on ebay its an expensive way to accept payment for businesses

 

[Frugaldom]

I know this may be a little bit late (newbie here) but I'd issue a word of caution about customers offering to pay via BACS or direct transfer online. Please do your best to ensure that the customer is 100% genuine and here's exactly why:

We fell fowl of a huge scam a couple of years ago, one that caught out many online traders and probably still is. Unless you manage to spot the banking errors as soon as they appear, there's not a lot you can do about it. I believe sites like eBay were/possibly still are rife with these (and many other) fraudsters. Customer initiates a purchase, invoicing gets activated etc, then you receive a perfectly innocent query about paying directly into your account - alleged customer has no PayPal or whatever. (I believe you now NEED a PayPal account for eBay) As soon as you submit their invoice containing the relevant bank account name, sort code and account number they have all they need. No payment arrives. You assume non paying bidder/buyer or cancelled order and then, one day, you notice an unusual direct debit. That's the start of it. Being a 'frugaleur', I spotted mine as soon as the first debit was applied to my account, but many don't spot them (notice THEM, not 'it') until several months later. As it turned out, my account details had been set up to insure a house and contents and several brand new cars, amongst other things. Police & Bank fraud investigation units get involved, banks refund the unauthorised payments, insurance companies cancel the policies after a few checks and then the case gets dropped! Why?

Because if nobody loses any money, there can be no crime!

I had to do a fair bit of investigating for myself on this - wrote it up in published reports as I went along - but, in my opinion, it's still going on and the whole lot is being covered up by the financial institutions involved. Cybercrime - probably the biggest threat to business in the 21st Century and it appears to be subject to several cover-ups. It doesn't need a genius to see why.

Please, if anyone is accepting payments for online transactions direct to bank accounts, scrutinise your statements often and keep on doing so. It may take a week, a month or, even, a year before the fraudsters deploy their plan but they already have your details. (They can lift exact same from a cheque). I could bore you all to tears with all my findings on this extremely well orchestrated scam but won't waffle any longer. I just felt it pertinent to share my findings with you.

I did, apparently, have a second attempt made but via my credEcard account, which doesn't allow a facility for direct debits to third parties. That attempt failed. CredEcard also provides you with a barcode so anyone alleging not to have a method for paying online can simply be sent an invoice for paying cash anywhere they see the PayPoint sign.

Hope this helps make a few more people aware of this simple scam.

 

[Mike Lewis]

Thanks for posting that warning, Frugaldom.

A couple of weeks ago, I read about another, similar, scam that was targeting Scottish local authorities. One council lost several thousand pounds.

In this case, the technique is extremely simple. The fraudster simply writes a letter to the council's accounts department. The letter is on the letterhead of a large company which does a lot of business with local councils. The company is genuine, but the letter is a fake.

The letter simply says that the company was changing its bank account, and would the council please update its records. The letter gives a new account number and sort code.

A clerk in the council's accounts dept simply enters the changes into the genuine supplier's records. The next time the council is due to pay the supplier, the money goes to the fraudster's bank account.

It can typically take two or three months before anyone realises what is going on. That's because all the accounting entries appear to be correct and there's no breach of security.

It's only when the genuine supplier starts chasing the council for money, and someone investigates, that the truth comes to light - by which time the crooks are long gone.

This sort of scam can hit all of us - not just councils or large companies. So, if you ever get a letter like that, take a moment to check with the supplier to see if it's genuine.

Mike

 

[Scottish Business Owner]

Linked o the story Mike was talking about below - It was actually £100,000!!!!

Council conned out of £100,000 days after warning over scams - Herald Scotland | News | Home News

It's really amazing how simple that con is. As much as the advice to always check is sound I wonder how practical this is in bigger finance departments? Just a thought.

It always astounds me that something so simple as getting paid for an invoice could become so messy and costly. Thanks for the warning Frugaldom

 

[Frugaldom]

Thanks for the link, , just shows how thios scam has escalated over the past couple of years and makes me thinkk that as each small loophole gets closed, another, far bigger, opens up to swallow thousands more.

The way they conned the insurance companies was to go around some car showrooms, collecting the details for cars that were sat on the forecourt. These cars were then insured by the conmen using the easily acquired bank details of folks like us. I think that the most annoying thing, for me, was the refusal for the police to take any action. The whole thing was washed over as though we'd just to forget all about it. The investigating officer on our case did try his hardest, I know that, because we saw him outside of duty and were told of an episode whereby he was warned off pursuing the case. He apparently "got his knuckles rapped" for investigating potential leads supplied by us! Alarm bells were ringing, that's for sure, so I went public with it and asked anyone in a similar situation to get in contact. And they did - a lengthy list of them.

My reckoning is that it's same scam but that scam is one that's been honed over the past few years. Why target a load of little people when a couple of big hits could be enough for them to move on - the councils will need to pursue it because they HAVE lost money, OUR MONEY! Makes me so mad that police forces throughout the UK have been aware of the bank details/direct debit scam for so many years yet NEVER alerted the public.

 

[Frugaldom]

Apologies for typos in above post. I did try to edit but then got distracted; edit page timed out, site refused to allow me to complete the changes, I'm a bad typer, what else can I say? Perhaps another set of sticky alphabet letters for my keyboard would be a good idea - no letters on keys and bad typing skills aren't the best combination.

 

[Dizzydiza]

Is there any other way a small business like mine can take payments safely but cheaply online. With my face to face customers most of them are happy to pay cash and my distance customers sometimes pay me either by cheque or postal orders but mostly by paypal. This direct payment through the bank is new to me but so far has been quite successful to those who I have provided the details to. I am worried that if I ask a handling fee for paypal it will put them off buying especially as they are already covering postage.

 

[Frugaldom]

In my experience, all business transactions incur some form of fee, even direct transfers, so best just to work those costs into your pricing structure right from the start.

Hope trading is brisk.

 

[Dizzydiza]

Thank you, but this time of year is particularly quiet for me. As a carer I cant really push my business, so Paypal fees along with fees to attend wedding exhibitions followed by the occasional advert in a local newspaper are a major drain on my income.

 

[Mike Lewis]

As Frugaldom rightly says, all payment methods involve some sort of fee. But direct payment into the bank account is usually the cheapest, and is very secure, provided both parties observe the usual common sense precautions.

Dizzydiza, you say you are worried that adding a PayPal handling fee will put customers off. You're right. It will. The customer isn't concerned with how your arrange your banking, and shouldn't foot the bill.

By all means, adjust your prices to cover for all your admin costs, but only as far as the market will bear. Adding admin charges and surcharges smacks of the Ryanair way of doing business.

Mike

 

[stugster]

Mike's covered it well, but just to add, if you had a bank account with Santander/Abbey, they don't charge you for Bank Transfers or Cheque Deposits (up to a certain number per month).

We've had absolutely free banking from Abbey for about three years now!

 

[Mike Lewis]

Mike's covered it well, but just to add, if you had a bank account with Santander/Abbey, they don't charge you for Bank Transfers

Stuart, does that apply to business accounts, do you know?

Mike

 

[stugster]

Sorry, that is business accounts