Word Street Journal

As a business owner, you must understand how important it is to make recurring payments at the end of each month. These payments are made to cover expenses like vendor payments, business-related subscriptions, and more. Also, if you have a service-based business, you must have a good system onboard to accept recurring payments. 

Ditching conventional transfer processes and switching to GIRO transactions is an excellent way to maintain all the recurring payments. However, to make the most out of these transactions, there are a few things that you must remember to make the best out of the payment method.

What are GIRO transactions?

GIRO is a way to transfer money electronically from your bank account to pay bills or receive payments. It allows money to move directly between bank accounts without using cash or checks. GIRO is popular in countries with electronic banking systems.

Interbank GIRO involves three parties – you, your bank, and a billing organization. A billing organization can be a government agency or a private company that you need to pay.

GIRO is an arrangement where your bank helps you automatically make payments to the billing organization for any bills you owe them. The money is transferred right from your bank account to the billing organization’s account.

So, instead of writing a check or making a cash payment, you set up GIRO through your bank. The bank then sends the payment amount electronically to the billing company’s account whenever you have a bill due.

This makes it very easy and convenient to pay bills on time without having to go through multiple steps each time. The billing organization receives your payment automatically through the GIRO system set up with your bank.

GIRO transfers make bill payments simple by directly moving money between accounts, saving time and effort compared to older payment methods. As long as you have sufficient funds in your account, GIRO ensures your bills get paid on time electronically.

Useful Tips About GIRO Transactions

• Regularly check your business bank statements, as GIRO deductions will be clearly listed, showing the company or organization you paid. See if your bank or the payment recipients offer email or text notifications for GIRO payments to help you stay updated. Logging into your online banking is a convenient way to view your transaction history and monitor GIRO deductions. Look for a section listing upcoming scheduled payments where your GIRO deductions may appear. Be sure to keep any payment confirmation emails or receipts you receive as records of your GIRO payments. Develop a simple tracking system for your regular bills and expected GIRO deductions so you can compare the actual payments made against what you were expecting.
• You must make sure you have enough money in your account to cover the GIRO transactions. If there are insufficient funds, the billing organizations may notify you that the payment did not go through and give you a second date when they will try to deduct the money again. The billing organizations might ask you to use a different payment method if needed. They can also charge you fees to cover processing costs for failed GIRO deductions due to a lack of funds in your account. Some banks in Singapore may charge you around $10 for each unsuccessful GIRO deduction because you did not have enough money in your account.
• Setting up a new GIRO account takes a long time. It will take approximately 3 to 4 weeks from when you start the process until it is completely set up and ready to use.
• With the new eGIRO process, it happens much faster. For individual consumers, eGIRO accounts can be set up and ready in just minutes. For business accounts that require approvals, eGIRO takes less than two days to be activated. eGIRO is so quick because it is available online 24 hours a day, seven days a week.

Conclusion

GIRO transactions offer a convenient and automated way for businesses to manage recurring payments, eliminating the need for manual processes. By ensuring sufficient funds, monitoring transactions, and taking advantage of eGIRO’s faster setup time, businesses can streamline their payment processes and focus on core operations. Adopting GIRO can significantly improve efficiency and reduce the risk of missed or late payments, making it an invaluable tool for modern businesses.