Direct Debit vs. Payment Gateways

According to the 2019 Nielsen Payment Landscape report, two in three Malaysians have gone cashless with 57% of the population utilising online banking, and only 27% have opted to use credit cards to pay for their expenses.

There is no denying that when it comes to accepting and processing payments, payment gateways such as PayPal and Stripe have been the de facto solution for business owners. However, with the rise of the subscription economy and the shift towards payment digitisation, many more viable options for processing recurring payments such as Direct Debit have surfaced in the market.

So, whether you are a new business looking to set up a new payment system, or if you are a regular business planning to switch up your payment providers, any changes you make to the payment methods makes that much of a difference from having to make a successful sale, to losing that particular customer to another merchant due to payment preference issues.

In this article, we will shed some light on Direct Debit vs. Payment Gateways along with their differences, benefits as well as disadvantages to help you narrow down your choice to best suit your business needs.

But first…

What Is It And How Does It Work?

Let’s start off with payment gateways. A payment gateway is a conduit between the customer and the merchant that processes credit card payments for businesses. A virtual service that collects credit card information securely, stores it, and routes it to a payment processor every time a transaction needs to be made. As a Third Party Acquirer (TPA), the proceeds of your transactions will be received on your behalf before the funds are directed to your bank account in batches over a certain period of time.

On the other hand, and contrary to popular belief, Direct Debit is not a payment gateway, but is categorised as a payment solution that allows businesses to pull payments directly from their customers’ bank account. It is the easiest way for businesses to receive regular or recurring payments from a customer. By filling out a one-time online eMandate form, the customer gives permission for the business to collect payments directly from their account when it is due. Unlike traditional TPAs, settlement happens solely between the buyer’s bank and the seller’s bank, and the funds will go directly into the merchant’s bank account.

So, while there are plenty of payment solutions in the market, there is no one solution that fits all. What is less clear for people for the most part are the ins-and-outs related to each of these concepts, and how choosing and configuring them can impact your business.


Distinguishing The Key Differences
Which one is better?

With all that is being said, the answer to this question boils down to the 3 important differentiations below that could make or break your business.

Flexibility – Utilising a subscription model is more than just charging the same fees to the same customers over a certain period of time. You should also take into consideration of having a payment provider that supports a variety of package plans, to offer not only a variety of billing cycles but with flexible time periods and multiple pricing levels as well to improve customer retention.

Settlement/Payout policy – While some payouts are performed on the same day, others may be performed in batches and could take multiple days before it is successfully transacted into your account. Find a solution that will ensure that you receive the payments on time so that you are able to predict your cash flow.

Reporting – Whether you want to see a single transaction or analyze trends for an entire portfolio, reporting gives you real-time visibility into your transactions. You would want a solution that provides not only daily transaction reports, but also specialised ones such as settlement report, payment modes report, unsettled/failed transactions report, etc.

In any case, both Direct Debit and Payment Gateway solutions offer services beyond payment processing. However, if your plan is to collect recurring payments, then the advantages are obvious. While payment gateways provide options for recurring subscriptions, credit card payments often expire and lead to high level of churn. So, if you are a subscription-based business utilising credit card payments, you might want to rethink your strategy on this.


How Does Curlec Stand Out?

As the only payment solutions provider that utilises online Direct Debit in Malaysia, Curlec creates a seamless payment experience that enables you to get paid on time, every time via Direct Debit and Instant Pay (FPX).

Curlec’s simplicity makes a powerful platform for businesses of all shapes and sizes as the system is designed to save you time and manual administrative work, allowing you to focus on growing your business. Hence, putting you, the merchants in control of your own cash flow.

Want to talk to us about swapping your current payment solution provider to Curlec? Contact us below and we will get in touch soon!

Life at Curlec

Steve Kucia: Working with Millennials in FinTech

As the first online Direct Debit payment provider in Malaysia, Curlec was founded with the vision to make it as easy as possible for businesses to collect recurring payments. And 2019 has proven to be a big year for Curlec. Not only did the company see tremendous growth, but it has also surpassed the RM100 Million mark in transaction value, just 18 months after launching.

Behind all these successes, the company is deeply rooted with an amazing set of people that work hard to disrupt the payment industry that we all know today, and take its place as one of the leading players when it comes to payments via Direct Debit in Malaysia.

We sat down with Co-Founder and Director, Steve Kucia who shares his insights on what it is like to work with a young team in a dynamic and fast-growing startup.


This feels like, sort of, a golden year for Direct Debit and Curlec in Malaysia. Tell us more about your milestones and the team behind the success.

I think golden year might be an understatement. If you just take the number of active merchants using Direct Debit when Curlec started and compare that to the number of merchants that are effectively using Direct Debit now, we have added 50% to that number, and I wouldn’t be at all surprised by the end of 2020, we would end up more than doubling the number of active merchants using Direct Debit in the country.

As a small team, we are fortunate that at least 5 of our core team members were involved in the original program with MEPS a little bit over 8 years ago. So there is a tremendous body of knowledge around Direct Debit in our small organisation. We have seen the inception of the paper-based system, the introduction of the electronic eMandate, and all the collection processes. We’ve seen it all. And I don’t think anybody can go as far back and come to where we are today with the whole process as we have done.

You don’t just wake up one morning and suddenly know all there is to know about Direct Debit. The combination of experience and enthusiasm in taking this to the wider market is a wonderful recipe for success.

Definitely more than a golden year for us.


The team is made up of mostly young professionals and millennials – is that shaped by the work you do?

We bring new people in; young programmers and salespeople to our team. Many of our programmers joined as graduates and stayed on. And that has been great because as I look at these people now, I’ve seen them grow intellectually and their knowledge on Direct Debit has expanded tremendously over the last 2 to 3 years.

Some people say that technology is a young person’s field. If you read the book Outliers by Malcolm Gladwell, it talks about how some people are lucky based on the year that they were born and what surrounded them at the time enabled them to progress in life. I was born around the same period as Bill Gates and Steve Jobs, and it’s true that most people in technology today are the younger generation.

But my belief is that you cannot necessarily put an old head on young shoulders and expect a young person to operate in a way in which a person who has got 10, 20 or 30 years of experience and successfully run a business.

So many startups start quite quickly and I would guess about 90% of them fail for lots of reasons. But one of the main reasons is because they don’t manage their money quite well. And you can easily see that not just with the startups here but also around the world.

In our case, we are very lucky. My Co-Founder, Zac Liew and I are miles apart in terms of age. He brings energy and enthusiasm to the partnership that is needed in a young startup company like this. And perhaps my contribution is a bit more level headed in building this business and make a profit for the long term.

Steve Kucia, 64, and Co-Founder, Zac Liew, 28.

The office is designed in a very garage style setting. Could you describe what you were trying to achieve when you created this space?

You can look at some startups that go absolutely crazy with lavish offices, with a pool table or ping pong table. For some that might be cool, but I think it somewhat detracts from what we are all here to do, which is to provide service for our customers.

Of course, we want to be comfortable. Physically, we work closely together because we have a lot of people working in a small space. But within our company, we do flexible working hours, we don’t worry about when people take their holidays. There is no admin or forms to fill in, but we have a guide to how many days someone should take in a year (14-15 days), but as long as the job is done, it’s ok.

So in terms of the physical nature in the office, we prefer to be open and have people easily talk to one another in an open environment, and luckily our building has lots of places to go to, be it coffee shops or the hotel lobby when it is necessary.

We do use a lot of co-working spaces (3-4 within the vicinity), office facilities as and when needed. So we subscribe to them. Why buy an expensive and furnished office when you can just go and have a half hour meeting in a nice place and pay a small fee. So I think the environment, whilst scant, serves its purpose.


What are you looking for when you hire a new person to join the team?

Depending on the role and experience the candidate has, the most important thing is the person’s willingness and ability to absorb and learn more.

For example, if you want to be a professional footballer, you would need to train most of your early life. But in this business, it’s not quite like that. Having a degree of expertise in specific fields is good, what’s more important is that you have the desire to learn more about it and become an expert in that field.

The goal for our team is to become experts. Our main tagline is that we’re always learning. The minute that we stop, we are taking a step or two back.

What’s next for Curlec?
First of all, we want to be the leading Direct Debit player in the Malaysian landscape and create that market here. And then extend our services beyond payments and towards subscription management.

The obvious thing is to take this great idea that we have and see what we can do by expanding in surrounding countries in ASEAN such as Singapore, Indonesia, Thailand and the Philippines. No one is doing Direct Debit in these countries properly if they are doing it at all.

Over RM100 million has passed through our platform in Malaysia in the last 18-20 months. The market knows that we are a payment platform that is trustworthy, and once our brand has built upon that level of trust, then, people in surrounding countries will start to know about us. Maybe not as the guys who processed RM100 million, but billions.

I expect us to grow and I expect the company and the staff to be admired and recognised outside of the company as the people that know how to guide our customers to better manage their cash flow. We will be the experts that people come to, to ask for advice. So I see that happening in the next couple of years and be more golden as I said.

Want to work with us? Our team come from a variety of backgrounds and we always welcome diversity – submit your applications today by visiting