GoCardless launches AI-enhanced same-day settlement for direct debit - Trade Treasury Payments

GoCardless, a payments fintech, has launched Same Day Settlement+, an AI-powered enhancement to its Direct Debit offering.

The new tool applies machine learning models to transaction data from more than 38 million accounts, with the hopes of accelerating payout times and reducing payment failure rates. 

GoCardless reports that the feature enables over 96% of successful Direct Debit collections to be settled on the same day. The company also states that the tool reduces late payment failures by more than 80%.

Direct Debit via BACS (Bankers’ Automated Clearing Services), a UK-based electronic payment system used to process direct debits and direct credits between bank accounts, typically follows a two-day settlement cycle. While same-day options exist, they have often carried a higher failure risk. 

Shaun Puckrin, Chief Product Officer at GoCardless, said, “We’re constantly innovating to make bank payments simpler and more efficient for businesses. Our new feature is a testament to that commitment, and a true differentiator for Direct Debit in the market. By combining payout speed with significantly reduced late failure rates, merchants can now enjoy the best of both worlds.”

The product is currently available to a limited group of GoCardless customers, with a phased release intended to further develop the models by incorporating a wider variety of payment scenarios.

Survey data cited by GoCardless indicates that 58% of merchants see same-day settlement as highly beneficial to their operations, primarily due to improved cash flow visibility. Additionally, 85% of respondents said quicker settlement could help strengthen business relationships with customers and suppliers.

John Cooper, Managing Director at Communicate Telecoms, a client of GoCardless, said, “The same-day settlement service has been a game-changer for our monthly bill run. Like many small businesses, cash flow is one of our biggest challenges, and this service has made it significantly more manageable to get our funds at speed. This provides a massive boost to our finances.”

The company expects Same Day Settlement+ help it compete in a growing market for real-time, low-failure-rate payment solutions, particularly among businesses that rely on bank-to-bank transfers for recurring or high-volume transactions.