GoCardless: Revolutionising Bank Payments for a Digital Age

In today’s market, GoCardless has emerged as a significant player, transforming the way businesses collect payments directly from customers' bank accounts. 

Founded 13 years ago, the company has grown from addressing a simple access problem for small businesses to processing approximately US$35bn annually for around 100,000 merchants.

GoCardless: From inception to industry leader

Hiroki Takeuchi, Co-founder and CEO of GoCardless, explains the company's inception: “We were struck by how expensive and complicated the whole payment system was. We asked ourselves, if you were to design a payment system for the internet, what would it look like?”

This question led Hiroki and his team to focus on bank payment rails, a direct method of moving money that had been historically underutilised. By building technology on top of these rails, GoCardless has created a proposition that initially centred on recurring payments, such as subscriptions and invoicing.

The company's growth trajectory can be divided into distinct phases. In its early days, GoCardless solved an access problem for small businesses. “We were trying to start a business and get access to payment processing. Card payments, the only real option then, were far too expensive for what we were trying to do,” Hiroki recalls.

As GoCardless expanded, it discovered that larger organisations were also grappling with payment processing issues, not due to lack of access, but because of outdated technology. 

Hiroki notes: “We were seeing many businesses moving their operations to the cloud, trying to move more of their processing into this automated cloud-based setup. As they went through these digital transformations, they were struggling to get the payments to talk to those online systems.”

GoCardless' cloud-oriented, API-based approach proved to be a perfect fit for these larger businesses undergoing digital transformation. This has allowed the company to serve a wide spectrum of clients, from micro-organisations to some of the world's biggest brands.

More recently, GoCardless has turned its attention to solving international payment challenges. “One of the big challenges with bank payments is that every country has its own banking system. It's very fragmented,” Hiroki explains. 

“What we've done is connected these banking systems around the world into a single platform. With a single contract and integration, you can collect payments from customers across about 30-plus countries directly from their bank account.”

This solution has made it significantly easier for businesses with a global footprint to collect payments optimally without navigating multiple complex systems.

GoCardless has been active on the M&A front too, recently agreeing to acquire Nuapay from EML Payments. It has also extended its partnership with Intuit to empower SMEs in the US and Australia with Direct Debit, and has signed a similar deal with Airwallex to support its clients across key markets. 

Staying at the forefront of innovation

Looking to the future, GoCardless is excited about the potential of open banking and real-time bank payment systems. Hiroki believes these innovations will “make a massive difference to the way payments work online in a wider variety of use cases”.

The company has already invested heavily in these areas, embedding open banking into its offering and seeing improvements in payment collection for existing customers. 

However, Hiroki acknowledges that these technologies are still maturing: “The reality is that these are still very maturing technologies, especially open banking, where the experience of paying via open banking is changing all the time. It's getting better and better.”

Despite the nascent stage of these technologies, GoCardless is observing its customers experimenting with new rails and technologies to create innovative payment experiences. 

“We're seeing some of our customers experiment with these new rails and technologies to create payment experiences in places that we just never really predicted,” Hiroki says. 

“Real-world point-of-sale transactions, e-commerce use cases - we're seeing a very wide variety of applications, but it's still in the early stages.”

As GoCardless continues to grow and innovate, it remains focused on its core mission of building a comprehensive bank payment network. 

Hiroki concludes: “We have a pretty clear vision and strategy. We're trying to build this bank payment network, really trying to enable as many transactions through bank payment rails as possible. We have to do that in steps, but we're excited about where this journey is taking us.”

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