Nov 06, 2017

8 tips for comparing Direct Debit services

You collect recurring payments from your customers. So far, you were paid for your services via either standing order or bank transfer. However, the admin work and chasing late payers is becoming overwhelming so you decided that you want to sign up your customers to Direct Debit.

How do you know which service is best for you? Don’t they all offer the same thing? We explore 8 tips that should help you find the right solution for your business’ needs.


Top 8 Direct Debit service comparison tips


1. Branded solution

Many providers throw around the term ‘fully branded solution’, so it is important to understand just how ‘branded’ the solution is. A good indication is to ask what will show up on your customers’ bank statements.

If it is fully branded, the name you have stated on the initial application form with your provider should be the only company name your customers see and not ‘Provider name – your company name’.

There is an 18-character limit on bank statements, so if customers see the name of your provider and only part of your company name, chances are that they will cancel that payment.  Also, it doesn’t maintain a professional image with your payers, does it?

A fully branded solution should ensure that the Direct Debit service provider is hidden. This means all mandatory correspondences to your customers will look like they are coming from you, and if you require an online sign-up facility, whether it is hosted by you or the service provider, it should be identical to your website to ensure continuity.

2. Funds collected

Any organisation that wants to collect Direct Debit payments must obtain a Service User Number (SUN). This is a unique six-digit number allocated to a service user to enable identification with Bacs for payment processing. You may want to ask your provider if this SUN is in fact unique to your organisation, or if you are sharing it with a number of different companies.

3. API solution

API stands for Application Programming Interface. Ask the provider exactly what their API solution is capable of and how it can improve your business performance.

Is it a fully integrated service that automates the process with your back office systems? Does it offer a fully branded online sign-up solution?

4. Multiple channels to sign up your payers

Different people have different preferences about how they carry out transactions. To ensure your customers are satisfied, the best practice is to provide them with various methods to sign up to pay you via Direct Debit. Can your customers sign up face-to-face, over the telephone or online? Or is it restricted to just one method? If they do offer all three options, do they provide mandatory bank-approved scripts that must be read out to the payer in order to complete the transaction?

5. The Bacs audit

Bacs (the organisation behind the Direct Debit scheme in the UK) require any organisations that submit Direct Debit instructions on behalf of service users to undergo inspection audits to assess standards of security, technical competence and operational integrity. Bacs award or deny approved bureau status upon five categories. Ask the provider for their score in each category as this is a good indication of their dedication to secure and efficient payment processing.

6. Security of systems and processes

All payment service providers are subjected to very real risk and threats due to the sensitive information that passes through their systems. Understanding how your customers’ payment data is protected is one of, if not the most important consideration when choosing a provider. Where are the processing servers based? Are they based in-house or at an off-site data centre? Who has access to them? What layers of protection surround them?

In terms of security procedures, it is highly beneficial for you to find out what their internal security processes are. Risk analysis is an on-going process and must be bought into by every employee of the service provider. Ask the provider if they operate a certified information security management system.

7. Administration of payments

Always ask the prospective Direct Debit service provider for an online demo to see how you will be setting up and administering your payments. The system should be simple and intuitive, ensuring you spend as little time as possible, allowing you to return to your core activities.

8. Experience and support

When selecting a Direct Debit provider, you are entrusting them with your organisation’s cashflow. It is vital that you are confident in the experience and foothold they have within the payments industry as well as the level of support they provide.


Get in touch with SmartDebit to talk Direct Debit. We help organisations and businesses reduce customer churn, fees and improve reporting.

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