Direct Debits explained
What is Direct Debit?
Direct Debit is a simple and efficient way to receive regular payments from your clients or customers, saving both you and them time and hassle. You’ll never have to chase a late payment again.
If you want control over your regular payment collections and cash flow, Direct Debit is the solution. With your customer’s permission, you can access their bank account and collect the amount due on the scheduled date.
Focus on what you do best – running your business and providing your service – while knowing that payments will arrive exactly when they should.
How We Work With You
Customer service is our top priority. Unlike the trend of chat-bots and online forms, our sales and support teams are always available by phone during office hours. We believe a personal approach leads to closer relationships and better outcomes.
Our services are designed to take the hassle out of Direct Debit management. Customers can set up a Direct Debit via an online form, over the phone, using a mobile app, or even traditional paper methods.
You can manage your transactions through our secure online portal, file uploads, or an API. We create profiles for each customer with a unique reference number, making it easy to track their payments.
Simply add the collection details, and the Direct Debit is set up, ready to start processing as agreed. You’ll have 24/7 access to the secure online portal, ensuring you never lose touch with your collections.
All new clients receive online training on how to use the system and maximize the benefits of the scheme. A member of our support team will guide you through the entire process and answer any questions you may have.
We aim to provide clarity and reliability with your revenue – give us a call or drop us a line, and we’ll be happy to set up a meeting.
Taking Direct Debit Payments
Payments in the Channel has years of experience in helping organizations optimize revenue streams through Direct Debit processing. We offer various solutions depending on whether your organization already has its own Service User Number (SUN) – a Bacs identifier for Direct Debit collectors.
If your organization has its own SUN, we can act as an authorized Bacs bureau on your behalf, enhancing the efficiency and convenience of your Direct Debit processing. We provide comprehensive enterprise-grade software, flexible APIs, and robust platform functionality to make administering your Direct Debit collections straightforward and hassle-free. Our customer service team is always available to address any issues or queries you may have.
For businesses and organizations without a SUN, we offer a fully managed service to support your Direct Debit processing. We will obtain a SUN on your behalf through our sponsor bank and handle all your Direct Debit collection activities. For managed accounts, customer payments are credited to their account, and we transfer the funds to your organization as quickly
Direct Debit collection services
Why Use Direct Debit?
Many people think Direct Debit is the same as a Standing Order, but there’s a key difference. While the customer controls the amount, date, and frequency of a Standing Order, Direct Debit collection puts your business in control.
Once the customer authorizes your organization to collect payments by Direct Debit, you can collect regular, recurring, or one-off payments whenever they are due. This gives you significantly greater control over your customer payment collections and cash flow.
We will work closely with you to find clarity with your revenue, offering a bespoke approach to Direct Debit processing and collection. Direct Debit collection isn’t a core activity for banks, but for us, it’s a specialized sector of expertise. Our objective is to help growing and established businesses – from SMEs to blue-chip organizations – access Direct Debit processing services and the Bacs system through our cutting-edge software solutions and bank partnerships.
The Direct Debit Process
The Direct Debit collection process involves three stages over three working days:
1. Collection and Forwarding
The first step in automated Direct Debit processing is producing a Direct Debit collection file, either by extracting data from the main database or by the user. This file is then forwarded to Bacs, the central payment clearing service, via the online submission channel Bacstel-IP, an approved Bacs bureau, or a compatible online business banking platform.
2. Processing
Once Bacs receives the Direct Debit collection file, it forwards the payment request to the payer’s bank based on the provided sort code information.
3. Transaction and Post-Submission
If the payer’s account has sufficient funds, the money is debited from their account and credited to the originating organization’s account on the same day. If the Direct Debit request is not paid, a reason code is returned to Bacs, usually on the day of presentation or the following day in exceptional circumstances. An ARUDD (Automated Return of Unpaid Direct Debits) report is generated and returned to the Direct Debit originator up to three working days after the collection date, specifying the reason for non-payment (e.g., insufficient funds or cancellation of the Direct Debit instruction).
Indemnity Claims
While issues with Direct Debits are rare, with an indemnity claim rate of less than 0.05%, we are prepared to assist you when they arise. The Direct Debit Guarantee provides customers with rights to refunds for debits made in error, preventing unscrupulous vendors from accessing customer accounts without authorization. Errors may also occur due to miscommunication, and any changes to Direct Debit arrangements must be communicated to the customer in advance.
We go a step further by helping and advising you through the claim process, potentially mitigating the risk of losing a customer. It’s all part of our service.
Collection and Processing
Our product can be white-labelled, allowing you to run payment collection services that display your company name on your customers’ bank statements.
Using our paperless web-based system, simply enter your customer’s details, specify the amount and collection date, and our technology will handle the rest. We submit your payment request to Bacs and debit your customer’s account on the requested date.
Transparent Branded Collection
Our service provides visibility into every transaction. You can see which payments were collected, which failed, and the reasons for any failures, allowing you to manage credit control issues promptly. Our sophisticated online systems enable you to manage various payment profiles: request variable amounts (ideal for utilities companies) or regular fixed amounts (e.g., subscriptions or fixed fee services). We also give you immediate visibility when a customer cancels their Direct Debit. We transfer all collected funds to you and invoice our fees the following month.
Safe Hands
Our services have low entry costs and include bespoke system training as part of the setup process, ensuring you feel supported. All transactions are covered by the Bacs indemnity, providing peace of mind for your customers.
At Payments in the Channel, we have worked hard to ensure our Direct Debit processing system is simple and straightforward for all our customers, whether setting up new Direct Debits or managing existing accounts. Using Direct Debit collection and processing can help businesses control and improve their cash flow, ensuring smooth financial operations.
A Personal Service, Suited to Your Business
Our secure online portal offers excellent functionality, allowing you to easily enter customer details, the amount to be debited, and the payment schedule – whether it’s weekly, monthly, a one-off payment, or an initial larger payment followed by smaller installments.
If you have your own Service User Number (SUN), Direct Debit payments will be sent directly to your bank account. If your payments are processed with a SUN we have obtained, funds will first arrive in our bank account before being transferred to you.
We have always aimed to minimize the turnaround time for your payments. Over the years, we’ve led the way in reducing the time between receiving your funds and transferring them to you. Five years ago, it took 5 days, then we reduced it to 3 days, and more recently to just 2 days. Other Direct Debit companies have followed our lead each time.
Once our Direct Debit system is operational, you’ll have 24/7 access and automatically receive reports of all transactions, including any failures and cancellations, enabling you to follow up promptly. Addressing issues quickly can help retain customers or at least provide valuable feedback.
Fair and Flexible Pricing
No two businesses are the same, and neither are their Direct Debit needs. We work with you on a personal level to provide a bespoke service tailored to your systems and payment levels. We can only give you an accurate price after discussing and understanding your requirements.
Arranging a Direct Debit facility isn’t something that can be done purely online. We actively encourage all clients and potential customers to talk to us on the phone. This helps build closer relationships and enhances our customer service.
While many customer support teams today rely on online forms or chat-bots, we are bucking this trend. You can be assured that whenever you have an issue with your Direct Debits, a member of our team will always be available by phone.
Direct Debit Services
Managed Direct Debits allow us to handle transactions on your behalf while keeping you and your customer in control.
If you’ve struggled to obtain a Service User Number (SUN) or found the process too lengthy, our Managed Direct Debit service offers a quick and efficient alternative, getting you set up in days rather than months.
Enabling Your Customers to Pay Quickly and Easily
With Managed Direct Debit, Payments in the Channel provide the SUN through our sponsor bank, using this specific SUN for all your transactions. Your account is branded with your company name, ensuring customers can easily reference their payments. Unlike some Direct Debit companies, our name won’t appear on your customers’ bank statements, avoiding confusion and maintaining brand consistency.
We act as the bank, providing sponsorship for your company. Funds first arrive in our bank account before being transferred to you, typically within two days. We’ve also reduced the time between purchase and bank account credit.
Managed Direct Debit is particularly useful for smaller businesses transitioning to regular, repeat payments, and non-profit organizations such as charities.
Keeping You Running in a Crisis
In the event of infrastructure damage or failure, our system ensures your business continues unaffected. Whether it’s a fire, power cut, or network compromise, our off-site and fully backed-up systems will keep collecting Direct Debit payments and maintaining your cash flow, avoiding issues with customers, suppliers, and staff.
We offer a prestige platform for processing Direct Debit collections, backed by an unrivalled personal approach to customer service. Talk to us, and we could set you up to receive Direct Debits in 6 days.
Our secure online portal offers excellent functionality, allowing you to easily enter customer details, the amount to be debited, and the payment schedule – whether it’s weekly, monthly, a one-off payment, or an initial larger payment followed by smaller installments.
If you have your own Service User Number (SUN), Direct Debit payments will be sent directly to your bank account. If your payments are processed with a SUN we have obtained, funds will first arrive in our bank account before being transferred to you.
We have always aimed to minimize the turnaround time for your payments. Over the years, we’ve led the way in reducing the time between receiving your funds and transferring them to you. Five years ago, it took 5 days, then we reduced it to 3 days, and more recently to just 2 days. Other Direct Debit companies have followed our lead each time.
Once our Direct Debit system is operational, you’ll have 24/7 access and automatically receive reports of all transactions, including any failures and cancellations, enabling you to follow up promptly. Addressing issues quickly can help retain customers or at least provide valuable feedback.
Fair and Flexible Pricing
No two businesses are the same, and neither are their Direct Debit needs. We work with you on a personal level to provide a bespoke service tailored to your systems and payment levels. We can only give you an accurate price after discussing and understanding your requirements.
Arranging a Direct Debit facility isn’t something that can be done purely online. We actively encourage all clients and potential customers to talk to us on the phone. This helps build closer relationships and enhances our customer service.
While many customer support teams today rely on online forms or chat-bots, we are bucking this trend. You can be assured that whenever you have an issue with your Direct Debits, a member of our team will always be available by phone.