Reduce churn, boost margins with global platform

GoCardless was founded in 2011 by Hiroki Takeuchi, Matt Robinson and Tom Blomfield, first-time entrepreneurs who wanted to improve the payments experience. The team set out to take the pain out of getting paid to enable businesses to focus on what they do best, company representatives stated. The initial objective was improving the way that companies collect recurring payments.

Today, more than 500 people work at GoCardless offices in London, Paris, Munich, Melbourne, San Francisco and New York City. Hiroki Takeuchi, chief executive officer and co-founder, leads a team of general managers with territories in the United Kingdom, France, DACH (Germany, Austria, Switzerland) and ANZ (Australia and New Zealand).

"GoCardless is unique in that we focus on recurring payments, or those often associated with subscriptions, invoices and installments," Takeuchi said. "We believe bank-to-bank payments are the best way to collect recurring payments and have used bank debit, or ACH debit, as it's known in the United States, to help our 60,000-plus merchants worldwide take payments."

Leveraging payment rails

Takeuchi further noted that ACH debit, like other bank debit systems, is a pull-based payment mechanism requiring payers to give merchants permission to pull funds from their accounts when payments are due. Automating the payments process, unlike push-based payments such as cash and check, takes the onus off the payer, improving the likelihood that businesses will be paid, he explained.

And while bank debit has clear advantages, Takeuchi pointed out that it is a legacy system that has not changed for decades. The GoCardless platform sits on top of bank debit "rails," making it a good fit for today's world by facilitating instantaneous, accessible payments, which are pre-integrated with over 150 platforms as part of a global bank debit network, he noted.

After launching an international payments platform with automatic FX settlement on the GoCardless platform, the company continued to grow and scale, serving over 60,000 customers and processing more than $20 billion in annual revenues. Over a third of UK-based adults and more than 4 million individuals across 35 countries have paid via GoCardless, and businesses can collect payments from 30 countries using the platform and a single bank account, Takeuchi stated.

Near-term product roadmap

Takeuchi noted that while the GoCardless platform is the company's sole product, it is continually updated, most recently with a new feature, Success+; launched in 2020, it helps businesses tackle problems caused by failed payments. "Success+ uses machine learning to [analyze] trends from GoCardless' recurring payments data and identify the ideal time to retry a failed payment," Takeuchi said. "It automatically schedules payment retries – within the parameters set by the merchant – on the optimal day for each payer."

Plans on the company's near-term road map include launching an open banking payment feature within the GoCardless platform that improves visibility and speed by enabling merchants to access recurring payments and instant open banking payments, Takeuchi stated. He added that the new feature will expand the GoCardless offering into the adjacent ecommerce market, challenging incumbent methods for one-off and card-on-file transactions.

U.S. presence

Acknowledging that open banking is a relatively new concept for U.S. consumers, Takeuchi expressed confidence that using this technology will improve efficiencies. For example, he noted, payers can use open banking to make an initial card payment and arrange for subsequent payments via ACH debit. Furthermore, Takeuchi explained that open banking will streamline subscriptions, utility bills and health club memberships when customers get a new credit/debit card, because with open banking, payment details only change when consumers switch bank accounts.

Looking ahead, Takeuchi expects the United States to continue to be a key market for GoCardless. The company has signed numerous enterprise clients, including DocuSign, 8x8, TripAdvisor, Box, and SurveyMonkey, and is helping U.S. merchants reduce churn, optimize payments and fight payment fraud, he stated.

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