Are there any £1 Direct Debits?

PixelPound

eschaton wrote: »

Quite simply, if a charity accepts DD's of £1 and above then it is worth their while or they wouldn't accept them.

I disagree, the idea is that they want to accept donations, and so have the policy of no donation is too small so will accept even just a quid. The reason being because by setting up the DD you are actively engaging with the charity, may well talk about the charity to others and take an interest in promotions etc. They don't want to turn you away if you want to help the charity but only have a quid spare.

Completely different to someone who wants to exploit the charity's willingness to encourage donations and give as little as possible for their own financial gain.

I don't know how much it costs, though there is a company that offers handling DD's for as low as 80p, so maybe they don't lose out on quid DD's, but they are not going to make much money. Trying to infer quid DD's to charities is a magnanimous gesture rather than an abuse of a charity's willingness to be accommodating to donors of all incomes is what gets some peoples backs up here. :mad:

Ashen

Zanderman wrote: »

That's not quite correct - they charge 1% of the DD amount to businesses, but have a minimum fee of 20p, which is 20% if the DD is only £1. Details at https://gocardless.com/pricing/

And for 'branded' DD's they charge £50 a month on top of these charges.

Their business model is to cut out costs to businesses - which by definition means that most businesses will normally be paying much more than this, otherwise GoCardless wouldn't be in business.

A charity running its own DDs would, therefore, almost certainly be paying much more than 20p for a £1 DD - through a mix of higher bank charges and their own staff costs.

You're making an assumption that businesses are using GoCardless to replace an existing direct debit system in place - whereas they seem more oriented to give businesses an easy option to add a direct debit option in place of more expensive payment methods. Therefore your conclusion that "by definition means that most businesses will normally be paying much more than this" isn't applicable.

In fact - their company name is proof of this - GoCardless - i.e. they market themselves as an alternative to people paying with card by far less automated methods which would have more added costs.

A medium sized charity is going to be processing a large number of direct debits, and this is before any reduced pricing they may get as a charity. A well-established charity is not going to be paying many times that of GoCardless for processing an ongoing payment. If anything, I would think it would be less.

stelee844

https://www.givingwhatwecan.org/ - This is a organisation which lets you donate £1.00 per month via DD to charity.

Alternatively (although not £1) have a look at your household Utilities (Gas/Electricity/Water etc) and see if they are all on DD's - Some companies even offer incentives for paying by DD if you don't already do so.

Ashen

nic_c wrote: »

I don't know how much it costs, though there is a company that offers handling DD's for as low as 80p, so maybe they don't lose out on quid DD's, but they are not going to make much money. Trying to infer quid DD's to charities is a magnanimous gesture rather than an abuse of a charity's willingness to be accommodating to donors of all incomes is what gets some peoples backs up here. :mad:

a) Sites like Little Debits and PayAQuid *obviously* make money through a £1 DD. Little Debits even declares that it gives 10% of their profit to charity...

b) There is no appropriate reason why an ongoing £1 DD would gain money for a commercial site, but lose money for a charity.

c) On the logical conclusion that an ongoing £1 DD does result in a net gain, I would much rather any money go to a charity than some random profiteer. All this talk about 'abuse' and 'exploitation' is just nonsense.

epm-84

EachPenny wrote: »

If you live in a simplistic world where the only cost to the charity is the external processing fee. The real world doesn't work like that.

I think you are missing the point, perhaps deliberately.

If you can explain how option (b) can ever be better than option (a) if the motive is to benefit the charity then please go ahead.

I'm pointing out a flaw in your analogy but you seem to want to refuse to accept it.

I used to work for an agency which did work for British Red Cross so I have an understanding of the operational side of a charity. All you seem to be coming up with is theories with no evidence to support them. If you can provide a link to a bank website promoting a charity account (not a business account) where it says it costs £10 to set up a direct debit or £1.50 per payment then you have something to support your theory. Otherwise there's no evidence to support your theory and there is evidence proving you are mistaken - see the post about the Dogs Trust helpline saying the cost to them is 8p.

EachPenny

epm-84 wrote: »

I'm pointing out a flaw in your analogy but you seem to want to refuse to accept it.

What I refuse to accept is that it can ever be better to expect a charity to process a direct debit for £1 and allow it keep whatever (if anything) is left (option b) compared to getting a commercial organisation to process the £1 DD, them allowing you to keep the whole £1, which you can then give to the charity if you wish (option a).

Arguments about the precise cost of each transaction, speculation about bulk discounts, gift aid additions... all of it is unimportant if there is a better way to donate £1 to charity than by a £1 direct debit.

nic_c wrote: »

...Trying to infer quid DD's to charities is a magnanimous gesture rather than an abuse of a charity's willingness to be accommodating to donors of all incomes is what gets some peoples backs up here.

Exactly.

Ashen

I like how EachPenny has now gone to the argument 'you should use commercial organisations to keep the £1', in the same thread that he also asterisks out the name of the key commercial organisation that does this, and asks people not to keep mentioning them.

mt99

Tried to find some facts on the cost of direct debits. Not much around but this seems to suggest they are less that 20-30p:

https://www.landz.co.uk/guides/a-direct-debit-collection-guide-for-charities/

"THE BENEFITS OF DIRECT DEBIT

The fees are low – Fundraising is a considerable cost to charities that they work hard to reduce. Receiving donations from credit cards or debit cards typically costs 2-3% of the transaction plus a flat fee of 20-30 pence. Direct debit payments are typically much cheaper."

mt99

This is 2010 but HSBC charged 14p per debit then:

https://www.pistonheads.com/gassing/topic.asp?t=792825

Zanderman

Ashen wrote: »

You're making an assumption that businesses are using GoCardless to replace an existing direct debit system in place - whereas they seem more oriented to give businesses an easy option to add a direct debit option in place of more expensive payment methods. Therefore your conclusion that "by definition means that most businesses will normally be paying much more than this" isn't applicable.

In fact - their company name is proof of this - GoCardless - i.e. they market themselves as an alternative to people paying with card by far less automated methods which would have more added costs.

A medium sized charity is going to be processing a large number of direct debits, and this is before any reduced pricing they may get as a charity. A well-established charity is not going to be paying many times that of GoCardless for processing an ongoing payment. If anything, I would think it would be less.

Fair point. I stand corrrected on my assumption that charities might need to pay more. You're right, GoCardless aren't claiming to be cheap, just easy.

My initial point still holds though - GoCardless, despite saying they take a fee of 1% per DD, actually take a minimum of 20p plus, for branded work, other charges. So for £1 it wouldn't be 1%.