Discover How to Collect Direct Debits from Customers

As a business owner or leader, you know that organisations thrive with consistent finance flows and smart systems. If your company collects regular customer payments, then you undoubtedly want easy solutions that facilitate secure payment collections.

Recent data shows that Direct Debit payments are rising in popularity, both with customers and businesses. In 2022, Direct Debit volumes rose 2% to 4.7 billion payments, which accounted for 10% of all payments. Plus, experts predict that Direct Debit services will reach 5 billion payments in 2032.

So, why are so many organisations tapping into the power of direct debit services to help support their customers?

Contents

• - Four benefits of Direct Debit for businesses.
• - How to take Direct Debit payments from customers.
• - The advantages of Direct Debit Facilities Management.
• - Working with Interbacs.

4 Benefits of Direct Debit for Businesses

Secure payments

Direct Debits are bank-to-bank transfers, making them a safe option for businesses to adopt. Not only do a large proportion of UK organisations use Direct Debit facilities, but government departments also use these to process various payments.

With a reduced risk of fraudulent activity and the Direct Debit Guarantee in place, customers are protected against any erroneous payments and can receive money back if an incorrect Direct Debit takes place.

Is your business ready to make the switch to direct debit collection?

Guaranteed timeframe

There’s no need to chase customers for payments, as Direct Debits are automatic, reducing the administrative burden of manual payments. Convenient and cost-effective, both customers and businesses are clear on payment dates and payment amounts.

Cost efficient

Using card networks to arrange payments can be costly for businesses. Direct Debits do not use this system, so employees can save resources and work on more valuable business objectives.

Simple system

Direct Debits are set up just once, making them easy to understand and efficient for payment collection. Once customers authorise you to set up a Direct Debit and supply their details, the system is up and running.

How to Take Direct Debit Payments from Customers

To take Direct Debit payments from your customers, you need to access the UK Direct Debit scheme, which is managed by Pay.UK. Depending on your business needs, you can either manage the Direct Debits yourself or use an approved third-party organisation with the experience to safely oversee your payment system.

Businesses with a Service User Number

Suppose you are a business with a Service User Number (SUN). In that case, you can partner with a BACS Approved Bureau to reduce business administration and the costs associated with the payment processes. This can take the worry out of payment management for you and your business, ensuring you can focus on your customers and business goals.

Businesses without a SUN

There are plenty of options for businesses that don’t have a SUN (Service User Number). To obtain a SUN, your business must operate for at least three years with a turnover of more than £1 million.

An increasingly popular choice for businesses is to work with a Direct Debit Facilities Management service, which can take over the whole process and manage your Direct Debit customer payments.

Direct Debit Mandates

To get started, you need your customers to share their bank account details and fill in a Direct Debit Mandate form, a Direct Debit Instruction (DDI). Direct Debits cannot be set up and approved without this information.

Once you have your customer’s signed DDI, you have their permission to collect the agreed payment from their bank on the acknowledged date. These payments will continue until a cancellation request has been received and approved.

The Advantages of Direct Debit Facilities Management

Mistakenly, some businesses believe that Direct Debit services are the domain of large companies and that a Direct Debit Facilities Management service won’t cater for smaller or medium sized businesses. In fact, Direct Debit Facilities Management services are ideal for any business, large or small.

Businesses that have found it challenging to gain Direct Debit services from their bank will also find Direct Debit Facilities Management a great option to scale their business finance flows and enable their customers to set up regular payments without the hassle of continual form filling.

Read about the benefits of direct debit management services in our blog.

Working with Interbacs

With the Interbacs Direct Debit Facilities Management service, our professionally qualified BACS team handles all administrative and monitoring the entire process. This is ideal for startups and businesses without a SUN. A clear benefit is that your business name appears on customer statements without the burden of managing BACS payments in-house.

You can also benefit from an individually tailored Direct Debit collection service, a responsive processing team, and a documentation design that suits your needs.

Our industry-recognised innovative solutions and experienced team of professional payment service providers allow you to grow on your terms by helping you become more time and cost-efficient and supporting you in your business aims.

For more information about our Direct Debit Facilities Management service or any of our other products and services, please contact us.