Managing Direct Debits: Will Direct Debits Come Out on a Saturday?

Unless you’re a payment processing expert, it’s unlikely you will be aware of the precise details around how Direct Debits are organised and payments taken. You may find yourself asking questions like will direct debits come out on a Saturday?

However, as these types of payments are the second most common online payment type for UK consumers at 57% in March 2024, businesses should be aware of Direct Debit organisational details so they can support customers in their payment decisions.

There are approximately 60,000 UK organisations using Direct Debit to collect a diverse range of payments, from subscriptions to regular payments. There are many reasons for this approach, not least the fact that setting up and managing these types of payments is a straightforward process for both businesses and customers.

Contents

• - How are Direct Debits Organised?
• - Will Direct Debits Come Out on a Saturday?
• - What is the Bacs Three-Day Cycle?
• - Gain Smart Support for your System with Interbacs.

How are Direct Debits organised?

Direct Debits are automated payments that businesses use to collect payments from their customers. These payments may be for household bills, services such as gym memberships or to pay for expensive goods and services in instalments.

Organisations ask their customers, particularly if they are new, to complete an instruction form, also known as a Direct Debit Mandate form. This proves that the customer agrees for a payment to be taken from their bank account for a set amount on a confirmed date.

Customers are covered by the Direct Debit Guarantee, which ensures that any organisation setting up Direct Debits should be vetted by the banks before they start to collect money.

In addition, the Direct Debit Guarantee also protects customers if a payment is taken out for the wrong amount or on the wrong date. Customers can get their money back for erroneous payments and can cancel Direct Debits by writing to their bank.

Will Direct Debits come out on a Saturday?

Timings for payment collection are reliant on the agreement between the organisation collecting the payment and their customer. If it has been agreed that the payment will occur on the same date every month, then that is the payment schedule for that particular Direct Debit.

Whatever is agreed between the organisation and the individual guides the payment programme. Some debits will be collected weekly, quarterly, annually, and monthly.

Suppose a payment is due to occur at the weekend or on a bank holiday. In that case, this will be deferred to the next working day, and collection will usually take place then unless the organisation taking the payment has informed the customer it will occur on another date.

Put simply, payment collection should happen when agreed by the customer and organisation, but it won’t happen at the weekend or on a bank holiday.

What is the Bacs three-day cycle?

Direct Debits are processed using the Bacs three-day cycle which is the timeline for banks to arrange Direct Debits. Here is a guide as to how this works:

• Day one

A payment request is submitted to Bacs, which the company distributes to relevant banks or building societies overnight.

• Day two

The relevant organisations receive the debit information by 6am. They work on preparing the Direct Debit for completion.

• Day three

All action is taken to complete Direct Debit approval. Your customer’s bank debit their account and your bank credits your account.

The Bacs three-day cycle is a straightforward process that enables businesses to oversee their systems and provides the opportunity to be notified of any payment failures in a short period of time.

Gain Smart Support for your Direct Debits with Interbacs.

With Interbacs, you gain access to a smooth and efficient Direct Debit solution that alleviates the stresses of processing for your teams. Manual payment organisation can be time consuming and costly, which is why the Interbacs solution helps your business free up time to focus on your goals.

If you have a reliable current payment process in place, customers are more likely to enjoy a frictionless customer journey. This helps you widen your customer base, gain new clients and strengthen your brand reputation.

Customers who are happy with your goods and services and don’t feel overwhelmed by complex payment procedures are far more likely to share positive feedback about your organisation.

Interbacs is also a Bacs Affiliate, one of the few payment institutions in the UK to have achieved this status, confirming our position as a leading service provider of Bacs Approved Solutions.

As a Bacs Affiliate, we have a say in the future of electronic payment processing in the UK. This gives us the opportunity to influence regulatory changes within the industry for the greater good of our clients and customers.

Alongside reduced stress and convenience, customers will also enjoy security and peace of mind as Interbacs is a BACS accredited Facilities Management provider which equals a user-friendly service for your business and customers.

If it’s time for your business to streamline payment solutions, visit our solution finder to discover the right payment solutions to match your goals with helpful advice to get you up and running in no time.