Direct Debit

What is Direct Debit?

Direct Debit is a simple, safe and speedy way for organisations to collect payments from customers automatically from their bank account. It offers an automated method of collection for a range of payments: subscriptions, loans, leasing, rent, mortgages etc. Direct Debit also provides a guarantee, which provides reassurance for customers.

Your customer simply gives their own bank an authorisation for your business to collect varying amounts from the customer's bank account on variable dates, agreed with the customer.

Benefits

Direct Debit can make your company's payment collection more efficient, manageable and more cost effective. Other advantages include:

  • Saves on collection and administration costs
  • Certainty associated with a definite payment date
  • Improves cash flow and enhanced customer service
  • Convenient way for your customers to pay
  • Better financial control as you specify the date of receipt into your account
  • Direct Debit guarantee – added reassurance for customers

How it works

Your customers fill in a Direct Debit Instruction (DDI) detailing their name, their bank's address and account details. When the DDI is complete, a collection date is agreed and the form signed.

Once your company wants to collect a payment from a customer, you create an electronic file and send the Direct Debit data to Bacs. This can be done directly, vie the Bacstel IP software, or indirectly, through a Bacs Bureaux. Costs for purchasing the Bacstel-IP software or making use of a Bacs Bureau could prove prohibitive for businesses making a low volume of transactions, so please consult your RM for guidance.

Direct Access

Payments can be submitted direct your PC to Bacs using Bacstel–IP. You will need a PC; the appropriate modem and Bacs approved Bacstel–IP software. Payment submissions are across five connection types: the Internet, Dial-up Extranet, Broadband Direct, DSL Connect and Fixed Extranet Connect.

Indirect Access

Payments can be submitted via a Bureau that will process the payments on your behalf.

Whichever type of access your business goes for, Bacs comes complete with a number of useful automated services:

  • ARUDD (Automated Return of Unpaid Direct Debits) – allows banks or building societies to return to the originator any Direct Debit instructions that they could not apply
  • ADDACS (Automated Direct Debit Amendment and Cancellation Service) – this service allows banks or building societies to advise Direct Debit originators of cancellations or amendments to Direct Debit instructions
  • AUDDIS (Automated Direct Debit Instruction Service) – automates the lodgement of Direct Debit instructions from your organisation to your customer's bank.

Timelines

The process operates within a three day cycle:

  • Day 1: input day when files will be submitted to Bacs
  • Day 2: processing day, where the file is transmitted to the customer's bank
  • Day 3: debit/credit day

Cut Off Times

Provided Bacs receives the data by 10.30pm on day one, payments will be debited/credited to the appropriate customer accounts by 9.30am on day three.

How to apply:

Applying for this product is simple. For more details on our Direct Debit product or for guidance on how to apply, please contact your Relationship Manager.

Charges applicable to the service.