Simplifying your payment collections

Direct Debit

Why use Direct Debit?

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Many people think a Direct Debit is the same as a Standing Order, but there’s a key difference. While the customer has ultimate authority over the amount, date and frequency of a Standing Order, Direct Debit collection puts your business in control. 

Once the customer has authorised your organisation to collect payments by Direct Debit, you can collect regular payments, recurring payments or one-off payments whenever they are due. This gives you significantly greater control over your customer payment collections, and therefore your cash flow.

London & Zurich will work closely with you to help 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 specialised sector of expertise. Our objective is to help growing and established businesses – from SMEs to blue chip organisations – get access to Direct Debit processing services and the Bacs system through our cutting-edge software solutions and bank partnerships.

Why London & Zurich
We make your payment collections simple and convenient by efficiently managing and facilitating Direct Debit transactions between your customers and your business.

The Direct Debit Process

There are essentially three stages to the Direct Debit collection process, which takes places over three working days:

Collection and Forwarding

As the first step in automated Direct Debit processing, a Direct Debit collection file is produced either by extracting the data from the main database, or by the user. The file is then forwarded to Bacs, the central payment clearing service. This is done either directly via the online submission channel Bacstel-IP, an approved Bacs bureau or a compatible online business banking platform.


Once Bacs has received the Direct Debit collection file from the originating organisation, it then forwards the request for payment to the payer’s bank, based on the provided sort code information.

Transaction and Post-Submission

If the paying account has sufficient funds to cover the Direct Debit collection request, the money is then debited from the payer’s bank account, and credited to the originating organisation’s account on the same day. When a requested Direct Debit is not paid by the payer’s bank, a reason code is returned to Bacs. This usually occurs on the day of presentation, but may be the following day in exceptional circumstances. An ARUDD (Automated Return of Unpaid Direct Debits) report will be generated and returned to the Direct Debit originator up to three working days after the collection date, specifying the reason the Direct Debit collection was unpaid (for example, insufficient funds in the payer’s account, or the payer has cancelled the Direct Debit instruction with their bank).

Indemnity claims

It’s very rare that we see any problems with Direct Debits, and across our business the indemnity claim rate is less than 0.05%, but we are willing and prepared to help you to deal with them when they arise.

The Direct Debit Guarantee quite rightly confers many rights to the customers when it comes to a refund for debits made in error. This is to prevent unscrupulous vendors from simply helping themselves to a customer’s bank account, but an error may equally have arisen through simple miscommunication. Any changes to Direct Debit arrangements must of course be advised to the customer in advance.

Going one step further, we will help and advise you through the claim process, and perhaps mitigate the likelihood of losing a customer altogether. It’s all part of the service.

Taking Direct Debit Payments Through L&Z

London & Zurich has years of experience in helping organisations with Direct Debit processing to optimise revenue streams. There are a variety of ways that we can help, depending on whether or not your organisation already has its own SUN – a Bacs Service User Number which identifies Direct Debit collectors.

If your organisation has its own SUN, we can act on your behalf as an authorised Bacs bureau, enhancing the efficiency and convenience of your Direct Debit processing. We offer comprehensive enterprise-grade software, flexible APIs and robust platform functionality to make administering your organisation’s Direct Debit collection straightforward and hassle-free. Our customer service team will be on hand to deal with any issues or queries you have.

For businesses and organisations that don’t currently have an SUN, we offer a fully managed service to support your Direct Debit processing. We will obtain an SUN on your behalf through our sponsor bank, and will handle all your Direct Debit collection activities on your behalf. For managed accounts, customer payments are credited to our London & Zurich account, and we will transfer the funds to your organisation as fast as possible.


The processes and rules around Direct Debit collection aren’t necessarily complicated, but we understand that if it isn’t part of your core business – and particularly if your organisation is just starting out – then there can be a bit of a learning curve. At London & Zurich we have years of experience in helping manage Direct Debit processing. We have developed a range of resources, guides and case studies to aid organisations in understanding Direct Debits, how they work and how we can help. Click through to see more.

Corporate & Enterprise

Our services take the problems out of Direct Debit and ensure security, compliance and efficiency.

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We’re here to make sure you get paid on time. When you’re managing a business, cash is king.

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Collection and Processing

We offer a white-label solution that you can brand as you wish, meaning your business name will appear on your customers’ bank statements.

Our product can be white labelled, allowing you to run payment collection services that show your company name on your customers’ bank statements.

Using our paperless web-based system all you need to do is enter your customer’s details, tell us when and how much you want to collect and our technology will do the rest. We submit your payment request to Bacs and debit your customer’s account on the requested date.

Transparent branded collection

Through our service, you can see the outcome of every transaction. We can tell you which payments were collected, which failed and why they failed. This allows you to manage any credit control issues promptly. Our sophisticated online systems give you the capability to manage any kind of payment profile: you can request a variable amount from your customers (ideal for utilities companies) or you can call for a regular fixed amount, for example; you are collecting regular subscriptions or fixed fee service. We help your cash flow in other ways: we give you immediate visibility of when a customer cancels their Direct Debit. We transfer all the money we have collected on your behalf and invoice you our fees the following month.

Safe hands

Entry costs to our services are low and we include bespoke system training as part of the set-up process, meaning you can relax knowing we are here to support you. Also, all of our transactions are covered by the Bacs indemnity, meaning your customers can relax too knowing they are protected.

At London & Zurich, we have worked hard to ensure our Direct Debit processing system is simple and straightforward for all our customers, whether they are setting up a new Direct Debit or managing existing accounts. Using Direct Debit collection and processing can help businesses control and improve their cash flow, ensuring their finances run smoothly.

Looking for more information?

New to Direct Debit

Learn how you can take control of payments and ensure your cash flow is predictable.

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Existing Customers

Technologies and processes change with the times. Are you benefiting from all of our services?

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Arrange a meeting

If you would like to speak to us about the services that we provide, arrange a meeting with one of our team.

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Frequently Asked Questions

Not with us. Many Direct Debit payment services place a limit on the amount that can be debited to you in one transaction, but we are able to do unlimited value collections.
Yes, the beauty of the system is that if you need to adjust payment amounts then it is easy and straightforward to do so through our online portal. For example, if you had a customer recently sign up for a course, you might take a larger initial payment to cover registration, and then a series of smaller monthly payments. Or if you run a spa, monthly debit payments might vary according to what they had spent on account at the bar or on added extras.
Firstly, you should write to them to let them know you are switching to Direct Debits. Many people will be relieved the payment process is getting easier. Then you need to get your customers to complete a mandate form - this can be online, via an app or by post - and return this to you. Don’t forget to offer to answer any queries they might have! Once you have the mandate form, you can use our system to set everything up, and you can start taking payments.
The interval between payments is entirely up to you - weekly, fortnightly, monthly, every ten days or even annually. Whatever arrangements you have made with your customers and clients can be accommodated.
Never ignore the common-sense basics. Don’t share your password with anyone, and think carefully about which other people in your business need access to the virtual platform, and what information they are able to see. Make sure your anti-virus software is up to date to prevent any malicious access to your office systems by spyware or trojan horses. And be careful who is looking over your shoulder!
An Application Programming Interface is the system or software you will use on screen or on your mobile device to access, edit and input information. It’s a simple piece of software designed to make it easy for you to use a more complicated system.

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