Direct Debit payment collection services

A Direct Debit is a simple, easy and safe way for your customers to set up and make regular and occasional payments to your business or organisation. 

It works by a customer giving permission to a business or organisation to take money from their bank account by submitting their account number and sort code. 

You’ll need to provide the customer with the amount they will be paying and when the money will be collected - before any payment is taken from their account. 

Money is collected from their account automatically and if there are any changes to when it’s going to be collected or the amount, you will need to notify them before it happens. 

Direct Debit is the most established payment in the UK for regular payments. Over 50% of bills are paid by Direct Debit and at least 9 out of 10 adults have at least one Direct Debit. 

Learn more about what is a Direct Debit.

A Direct Debit service provider is an organisation that is a specialist in handling online payments and money transfers. Usually called a Direct Debit bureau, they are experts in optimising your Direct Debit payments, conversions and minimising any payment failures.

Like Access PaySuite, they take care of all the manual work involved in making submissions to Bacs on your behalf. They usually have APIs that allow Direct Debit payments to be connected to software to automate business processes to free up time within your finance teams.

For any business looking to offer Direct Debit payments to customers, you have to have access to the Direct Debit Scheme which is owned and operated by Pay.UK.

There are two ways to get set up on the Direct Debit Scheme, either doing it yourself or via a third-party Direct Debit bureau.

1. Managing Direct Debits in-house:

This is usually for larger organisations who want to manage it themselves entirely, i.e. direct access, also known as becoming a direct submitter.

The first step would be to obtain a Service User Number (SUN) from your bank. This involves completing a series of forms which then the bank evaluates if your business is eligible for the Direct Debit scheme.

It can take several weeks for your bank to approve you as a direct submitter. You then need to develop or purchase the software to make the Direct Debit payments; as well as have the in-house knowledge to provide the right information to Bacs so payments are made accurately and on time.

2. Direct Debit outsourcing

A Direct Debit bureau looks after the submissions of your Direct Debit payments to Bacs. Some bureaus, like Access PaySuite, provide you with a webpage that lets you set up Direct Debits online or over the phone, as well as via paper.

However in the main bureaus are there to remove the manual processes, as all payments are automatically collected and submitted to Bacs without you needing to be involved.

There are two options for managing your Direct Debits via a bureau:

• Your own assigned SUN: This means that your name will show up on your customer bank statements, reducing any unnecessary cancellations.
• Making use of the bureau’s SUN: Direct Debit payments can be set quickly, however, your customers will see the bureau’s name on their statements, rather than yours.

To start collecting Direct Debit payments, your customer provides you with a Direct Debit Mandate or Direct Debit Instruction (DDI). This authorizes you to collect payments from them at any time.

For example, if your customers are agreeing to regular and fixed amount, such as a membership payment, there will be a specific payment that is taken at the same time.

To start taking Direct Debit payments, you just need to notify them via “Advance Notice” to let them know a payment is leaving their account. This is usually done in writing or by email and needs to be approved by your sponsoring bank.

The beauty of Direct Debit for fixed payments, there’s no need to keep notifying customers – an initial notification is enough before payment is collected.

However, for variable amounts, advance notice is needed before any change and must include the payment date and amount.

A bureau service is for organisations who have or are planning to get their own Service User Number. Facilities managed services are typically for smaller businesses looking to get set up straight away and use a third-party’s SUN to set up Direct Debit payment. 

Read more about our bureau services and facilities managed services