Can Money Still Be Collected If Direct Debit Is Cancelled?

The ability to control financial streams is vital for many companies in today’s complex economic environment. Direct Debit management systems deliver reassurance for both organisations and customers that payments will occur on time and for an agreed amount.

Monthly Direct Debit average transaction amount data tells us that Direct Debit payments are reliable in nature. This is because, when tracked month by month and on an annual basis, average transaction amounts seem to be relatively stable. An example of this is a comparison of average transaction amounts of £101.55 in March 2024 and £101.69 in July of this year. 

As an illustration for businesses of all sizes, this data confirms how consistent Direct Debit revenue streams are, generating robust and secure financial support to ensure organisations can go from strength to strength. 

With Direct Debit volumes rising by 2% to 4.8 billion payments and reflecting 10% of all payments in 2023, now is a good time to offer Direct Debit payments options for customers. Plus, can money still be collected if Direct Debit is cancelled? This is an important question for customers to understand. 

Contents

• What is Direct Debit collection?
• Can I cancel a Direct Debit?
• Can money still be collected if Direct Debit is cancelled?
• Partner with Interbacs for secure Direct Debit management.

What is Direct Debit collection?

A Direct Debit collection is a popular method of payment which enables businesses to take a certain agreed amount of money on a predetermined date from a customer’s bank account. 

If customers want to purchase goods or services from an organisation, they can complete a Direct Debit mandate form. This gives the company and the supervising bank all of the customer’s necessary information required to set up and approve a Direct Debit transaction. 

Pay.uk is the institution that manages Direct Debit transactions in the UK. Their Q1 quarterly 2024 statistical report reveals that year-on-year, Direct Debit payments were high for council tax (+13.3%), gym memberships(+6.6%), vehicle breakdown recovery membership (+6.4%) and health insurance (+5.8%). 

This report confirms the perspective that Direct Debits help businesses gain a sense of increased security around the fact that payments will be received in a timely manner and additional costs should not be incurred. 

Can I cancel a Direct Debit?

A question often asked by customers is: ‘Can I cancel a Direct Debit?’ Customers may need additional information around the organisation and management of their Direct Debit transactions. 

Customers can cancel a Direct Debit at their discretion. If a customer gets in contact with their bank, they can request a Direct Debit cancellation. With access to online banking, a customer can generally cancel Direct Debits from their chosen device, such as a mobile or laptop. 

It is helpful to advise customers to get in touch with your business if they decide to cancel their Direct Debit. Overall, this will enable your organisation to leverage more transparency and control over financial streams and manage revenue expectations. 

Can money still be collected if Direct Debit is cancelled?

As a rule, a Direct Debit payment should not be collected once it has been cancelled. A customer can cancel a Direct Debit at any time, usually by contacting the relevant business or their bank. If the cancellation is through a customer’s bank, you will receive an ADDACS (Automated Direct Debit Amendment And Cancellation Service) message. 

Any Direct Debit changes that occur should be applied immediately or within three working days of receiving an ADDACS message. It is good practice to regularly check updates from your bank or Direct Debit management service. 

Acting on a cancellation before the next payment date is imperative for your customers and your business, as customers may be able to raise an indemnity claim if an approved Direct Debit cancellation is not honoured. 

So, can money still be collected if Direct Debit is cancelled? If all of the correct protocols are followed, then a Direct Debit payment should not be collected once it has been cancelled. 

Partner with Interbacs for secure Direct Debit management

Interbacs offers market-leading Direct Debit solutions. As one of the first Bacs Solution Suppliers in the UK, our customers know that we deliver first-class Direct Debit systems. 

We have a range of products and services that help manage your cash flow, from our Bacs Approved Bureau to our InterPay Bacs payment software. Our Direct Debit solutions make signing up new customers a quick, easy and streamlined process. 

Browse our complete collection of Direct Debit solutions and find the perfect product to better support your business and your customers.