Failed Direct Debit payments are more than an inconvenience. They can create cash flow gaps, increase administrative workload, and damage customer trust. For local authorities, this might mean chasing unpaid council tax or adult social care fees. For businesses, it could mean lost subscription revenue or membership cancellations.
The good news? Many failed payments can be recovered quickly and compliantly through Direct Debit re-presentment. By retrying payments under the right conditions, you can reduce write-offs, improve cash flow, and maintain positive customer relationships.
What is a Direct Debit re-present?
A Direct Debit re-present is a second attempt to collect a payment that failed the first time. For example, if a customer’s account did not have enough funds on the original collection date, you can retry the same payment, but only if you follow the rules.
Key compliance requirements:
- Retry within 30 days of the original failure.
- The amount must be identical to the original payment.
- Use Code 18 to flag the transaction as a re-present.
- Notify the payer in advance of the retry date.
- Check the ARUDD report to understand why the payment failed and only retry if there is a reasonable chance of success.
This process ensures fairness, compliance, and a better chance of success.
Why do Direct Debits fail?
Direct Debit failures happen for several reasons:
- Insufficient funds in the payer’s account.
- Incorrect account details or mandate issues.
- Bank rejections, such as closed accounts or lack of authority.
- Technical errors in submission timing.
Understanding the reason for failure is critical. The ARUDD report provides this insight, helping you decide whether a retry is likely to succeed.
The rules at a glance
| Rule | Requirement | Why it matters |
| Timing | Retry within 30 days | Keeps the process compliant |
| Transaction code | Use Code 18 | Signals the retry to banks |
| Amount | Must match original | Avoids disputes |
| Notification | Inform the payer | Builds trust |
| Reason check | Review ARUDD | Improves success rate |
Why automated retries are a game changer
Manually managing failed payments is time-consuming and error-prone. Automation applies consistent rules, reduces admin, and improves recovery rates.
Benefits include:
- Better cash flow through higher collection success.
- Lower operational costs by removing manual intervention.
- Improved customer experience with proactive notifications.
- Compliance assurance with auditable retry logic.
Automating compliant re-presents lifts recovery and gives finance teams back hours each week. It means fewer manual chases and more predictable cash flow.
Best practices for successful re-presents
While automation helps, strategy matters too. Here are five best practices:
- Time retries wisely. Avoid weekends and align with income cycles.
- Communicate clearly. Notify customers of retry dates and amounts.
- Use ARUDD insights. Do not retry blindly, fix root causes first.
- Monitor performance. Track success rates and refine your approach.
- Stay compliant. Adhere to Code 18 and the 30-day rule.
Take control of failed payments today
Failed payments do not have to mean lost revenue. With smart, compliant Direct Debit re-presentment, you can recover funds efficiently while maintaining customer trust. Access PaySuite makes this easy with automated re-presents.
Ready to improve your Direct Debit success rate? Book a demo with Access PaySuite and see how we can help you recover more payments with less effort.
FAQs
What does Code 18 mean in direct debit payments?
Code 18 is the official transaction code used to identify a re-presented direct debit payment. It signals to the bank that this is a retry of a previously failed payment for the same amount, within the permitted timeframe.
How soon should I retry a failed direct debit?
You must re-present the payment within 30 days of the original failure. Timing matters — many organisations choose dates that align with typical income cycles, such as after payday, to improve success rates.
Do I need to notify the customer before retrying?
Yes. Best practice and compliance guidelines recommend notifying the payer in advance of the retry date and amount. This helps maintain trust and reduces disputes.
Can I change the amount when retrying a payment?
No. The amount must be identical to the original failed payment. If the amount changes, you need to treat it as a new collection and provide the required advance notice.
What is an ARUDD report and why is it important?
ARUDD stands for Automated Return of Unpaid Direct Debit. It provides the reason why a payment failed, such as insufficient funds or incorrect details. Reviewing this report before retrying helps you avoid repeated failures.
What happens if the retry fails again?
If a re-presented payment fails, you should consider alternative recovery options, such as card payments, payment plans, or direct customer contact. Automated retries should not continue indefinitely.