SAN FRANCISCO | Adyen announced that Dropbox will use Adyen's international payments platform starting with SEPA direct debits across 12 European countries. Adyen and Dropbox will soon work together to process payments in Latin America and Asia, in countries such as Brazil, Mexico and Japan.
From traditional long-term contracts toward paying monthly
According to Forrester, the use of Software-as-a-Service (SaaS) technologies, such as cloud storage, collaboration tools and email management, is expected to reach $75 billion in global sales in 2015.
As businesses and consumers have the flexibility to move away from traditional long-term contracts toward paying monthly or annual subscriptions, it becomes vital that SaaS providers have the right payment partner to facilitate local online payment methods to suit local market preferences.
For instance, while the U.S. is heavily credit card focused, in Europe, payment methods such as SEPA Direct Debit, Giropay, SOFORT, iDEAL, Carte Bancaire, and others are more popular. In fact, nearly 60 percent of all transactions in Germany and the Netherlands for SaaS and subscription-based services are processed via SEPA Direct Debit.
More Payment Methods and Markets to come
Starting today, customers are now able to purchase Dropbox via Direct Debit across 12 countries in Europe, with additional European payment methods to be added in the coming months. Further, Dropbox will work with Adyen to expand to additional international markets later this year.
Meet the needs of customers
“Dropbox has 120 million users in Europe and is growing faster here than in the U.S. As we grow it’s important we meet the needs of our customers, large and small, across different European countries. Adyen emerged as a great way to process multiple payment methods through a single platform, and will enable all our customers to pay with their preferred payment method."said Johann Butting, Head of Dropbox in Europe, Middle East and Africa.
Context: What is SEPA Direct Debit?
The SEPA Direct Debit is a Europe-wide direct debit system that allows merchants and businesses to collect euro currency payments from bank accounts in 34 SEPA countries on a one-off or recurrent basis. In non-eurozone countries like the UK, the SEPA direct debit scheme operates alongside the national direct debit scheme (till 31 October 2016).
A SEPA Direct Debit is a bank-transfer initiated by the merchant or business and (logically) is only allowed for with permission of the consumer (B2c) or business (B2B). These permissions are so-called 'mandates'. SEPA Direct Debits can be divided in SEPA Core Direct Debit and SEPA B2B Direct Debit. The difference between the two has to do with 'chargeback protection'.
While SEPA Core Direct Debits can be a cost-effective way of initiating payments throughout the euro-zone, it is good to know for merchants that these core direct debits can be charged backed for up to a period of 13 months. As B2B SEPA Direct Debits are not eligible for 'refund', despite situations whereby the payer can prove that no permission was given.
Merchants collecting payments through SEPA core direct debit could face additional costs in case banks honour consumer claims of false direct debits (50-60 euro per chargeback, differs per bank). It is of great importance for merchants to store these 'paper-based' mandates for at least 13 months to be able to show their bank the required evidence and minimise false direct debit costs. The banking community and other industry players are working towards e-mandates solutions whereby the process of gathering and storing consumers' and businesses' mandates becomes easier and cost-effective.
Despite this potential downside, the SEPA direct debit payment product is definitely well-suited for collecting payments cost-effectively across the eurozone. Especially for business with large volumes of recurring billings it seems a great way of being in control of billing and receiving money for the goods and services delivered.
Article sourced from Press Release by Adyen, March 3rd, 2015