GoCardless

Overview
GoCardless is an example of a Product business model. It provides direct debit service to its clients, who are individuals with bank accounts and companies that want an automated payment method to pull payment directly from their customers’ bank accounts.

History
Founded in January 2011 by Tom Blomfield, Matt Robinson and Hiroki Takeuchi after meeting at Oxford University, GoCardless entered Y Combinator’s summer cohort in 2011. Shortly thereafter, it secured $1.5 million in investment from Accel Partners and Passion Capital, followed by a $3.3 million funding round in April 2013 from the same funders. In January 2014, it received an additional $7 million from Balderton Capital, and was recently named as one of the UK’s hottest startups by the Gaurdian. As of January 2014, GoCardless handled $200M worth of transactions per year.

Customers
GoCardless’ customers are SME’s, multinationals, and individuals who would like to collect payments from customers directly out of customers’ bank accounts.

Engagement  — Value Creation Proposition
Direct debit payment systems are typically fast and cost effective, and GoCardless charges only 1% of transaction, capped at £2. It automates payments, tracking and reconciliation of payments. The customer can also benefited by no card expiry and no cancellation. GoCardless provides the same standard service to every client. It is a dyadic transactions between two individuals – GoCardless and its clients.

Delivery — Value Chain
GoCardless develops the software in-house, and customers purchase the software from GoCardless’ website. The direct debit software is designed to work alongside the customers’ existing transaction software and bank account management software.

Monetisation — Value Capture
GoCardless collects money from customers with two tiers of pricing. One is standard, charging 1 percent per transaction capped at 2 pounds. The other costs 200 pounds per month.