Direct Debit is the most recognised and trusted payment collection method for businesses of all shapes and sizes.
Whether it’s a regular subscription fee for content, charitable donations or membership fees for a club, direct debits are possibly the easiest way to collect customer payments.
Why should I collect by Direct Debit?
Moving your customers to direct debit can have immediate and long-lasting impacts for your business.
- Increased revenue for customers paying that don’t turn up
- Predictable revenue so you can plan for the future
- No more trips to the bank and risk of losing cash
- Quick and easy reconciliation for your account
- Removal of awkward conversations with customers when chasing missed payments
How do I start collecting Direct Debit payments?
If you want to take Direct Debit payments from your customers, first you need to decide whether to collect directly or through a bureau.
If you are going to take Direct Debit payments directly, your bank will be your ‘sponsor’. This means they will need to do some in-depth checks to make sure you can follow the rules of the scheme, especially the Direct Debit Guarantee which is strictly enforced.
You can submit payment information to Bacs directly by setting up your own Service User Number (SUN). In reality, this is usually only possible for large and well-established companies.
Smaller businesses or companies that only take a limited number of Direct Debit payments, can use a SUN through a ‘bureau’ who will manage the process on your behalf for a commission fee.
What is a Direct Debit Bureau?
A Direct Debit Bureau is a third party that takes charge of handling Direct Debit payments on your behalf. There are a number of reasons that a business might choose to use a Direct Debit Bureau, including:
- The business only makes a small number of Direct Debit or Bacs direct credit transactions each month
- The business is unable to fulfil all of the required criteria to be able to make direct submissions themselves to Bacs
- The business has only recently been established and their payment collection process is not currently sufficient or reliable
- The business is an SME with a relatively low turnover
For whatever reason a business chooses to use a Direct Debit Bureau, it ensures that the process for collecting payments is smooth and limits the responsibility of the business owner.
Getting your customers on board
Once you are set up to collect Direct Debits, you’ll need to get your customers to sign up.
This is done by getting them to complete a ‘mandate’ or instruction to their bank authorising you to take Direct Debit payments, either with a paper form or online.
If you are using a third party to manage your Direct Debit payments, they may offer additional services to make this even easier. For example, London & Zurich offers the simplest, fastest and most effective method of getting new customers signed up to your Direct Direct payments scheme. Instead of setting up over the phone or by post, our online sign up form means you can send a link for customers to complete it online.
When payments are taken, the data is sorted as to which bank it is going to, then transmitted to them to be credited into your account, at the same time as it is debited from your customers’ accounts.
Direct Debits with London & Zurich
London & Zurich has years of experience in helping organisations with Direct Debit processing. There are a variety of ways that we can help, depending on whether or not your organisation already has its own SUN.
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.
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.
If you are interested in taking Direct Debit payments, London & Zurich can help. We offer a fast, secure service tailored to your business requirements.
If you want to get started with Direct Debits, apply with us here.