Now we’re approaching the end of the year, it’s a good time to take a step back and reflect on just how far Direct Debit, Bacs and London & Zurich have come in 2017. Increasing consumer confidence, the security afforded by the Direct Debit Guarantee and the ease of use in such a busy world have all contributed to a record year for Direct Debit, and this is a trend that looks set to continue. Join us as we take a tour through the statistics that made 2017 such a landmark year…
The big picture
Since 1968, over 120 billion Bacs transactions have been debited or credited, with a record 111.7 million transactions processed in a single day. Over the last 10 years, the number of Direct Debit transactions being processed has risen from 2.9 million a year to a staggering 6.2 billion, with Direct Debit payments worth £1,262 billion in 2016 alone.
Over the last year, there have been more than 4 million Bacs payment collections. 119,401 of those were business-to-business collections made up of:
- General B2B collections – 53,198
- Commercial billing (including utilities, telephone, insurance) – 30,139
- Tax collection / National Insurance contributions – 12,929
- Business rates – 11,759
- Leasing and rentals – 8,583
- Credit card fees – 2,794
Net Promoter Score (NPS)
The Net Promoter Score (NPS) is an index that ranges from -100 to 100 and measures the willingness of customers to recommend a company’s products or service to others. An NPS that is positive (i.e. higher than zero) is considered to be good, while an NPS of 50+ is excellent. Over the last year, London & Zurich’s NPS has risen to 54, which is almost double the industry average of 34. This is something we hope to improve further over the coming the year.
A year of records
2017 was a landmark year for the industry when a new record was set nearly every month.
- January – News that the total number of payments processed by Bacs reached nearly £5 trillion in 2016, with 6.22 billion transactions over the course of the year.
- May – It was announced that 73 percent of household bills were paid by Direct Debit, with Direct Debit continuing to be the most popular method to pay regular bills.
- June – At the end of June, there were 111 million payments processed in a single day, outdoing the previous record high of 2.4 million just nine months before.
- July – Collections have also become faster, with London & Zurich introducing a new Faster Payments module which allows businesses to receive cleared funds from clients just two days after collection. There was also a record 120,000 transactions processed by Bacs in a single minute.
- August – Service levels reached new highs, with 95 percent of people who used the Current Account Switch Service admitting to being satisfied with their experience. This service was introduced to make it easier for consumers, charities and small businesses to switch current accounts between banks.
- September – The Current Account Switch Service celebrated its fourth anniversary in style with over 4 million current account switches.
- October – Late payments still remain one of the biggest problems in the UK economy, but Direct Debit is helping to reduce the burden. The value of payments owed to small businesses fell from £30 billion to £14 billion over the course of the year, with £2.16 billion overdue.
- November – Direct Debit payments now constitute 74 percent of all payments made by volume, with payments made by credit card and debit card falling by 16 percent last year.
More of the same in 2018
It has been an incredible year for Direct Debit payments in 2017 and all the signs show this is a trend that’s set to continue. If you’d like to know more about how Direct Debit payments can reduce the cost of late payments and increase your business’s growth, please get in touch with our team.