12 questions to ask a potential Direct Debit provider

Tip: There are 3 cost options a per transaction cost, a percentage of the transaction amount – capped at a maximum cost per transaction or a set amount based on a range of transaction volumes per month/year.

Work out your average monthly volume of transactions, and your average transaction value to work out which cost option would be best.

You should also check with your bank what their fees will be (normally an added per-transaction fee). Do they also charge per BACs file uploaded and downloaded? Some providers act as the bank and BACS provider so their costs might cover bank charges.

Tip: Look for suppliers that will facilitate you going paperless easily and automate communications with members, payment retries, submissions and downloads – these will impact your staff’s time most significantly.

Tip: Having your own SUN is preferred if you have higher volumes of Direct Debits – it’s normally cheaper and allows your own company name to appear on your member’s bank statements.

Look out for Direct Debit providers that can offer either of these options if you are a growing organisation or just want to test a provider first. Also, check how easy the process is to change from their bureau service to their direct submission service at a later stage.

Tip: A hosted page will always be compliant, mobile-friendly, will validate bank account information and addresses. Ideally, you will have a template provided by your provider which you can personalise with your logo and branding.

Tip: Look for a supplier that can send automated emails and ensure they are always compliant whenever a change about a mandate is made. You can make your own emails in your CRM which you can adjust as needed.

If you take mandates over the phone your supplier should also be able to help you make complaint scripts.

Tip: Many suppliers now offer European SEPA and Swedish Giropay on top of the UK BACS Direct Debit scheme. Some providers also have links with platforms, like Wise.com, to minimise the foreign currency conversion charges back to a UK bank account.

You may want to consider broader membership bases in the US (ACH), and Australia, New Zealand (BECS) or South Africa or Canada. There are providers that will allow you to take money from any of these schemes all using the same integration and API, and all into one UK bank account.

Tip: API integration, particularly a REST API, is the best option when connecting to your CRM. Using an API is fast, scalable and secure. Look for a supplier where there is online documentation of the API so you are in full control of the integration and made aware of any changes. The documentation should cover mandate submissions, modulus checking, payment submissions, but also crucially that can send notifications back to you when there are changes to mandates, or payments made/failed.

Tip: You should be able to use a testing environment to try out the processes. Make sure to also see how the solution handles bulk processing.

Tip: If you are changing your SUN, you will need to get a bulk-change-deed in place which legally allows you to move from one system to another. This process could take you 6-12 weeks.

You will also want a template to upload mandate details to the new system. You need to be able to match up mandate IDs to contacts in your CRM.

In addition, check how part paid invoices will be managed. Can you upload a manual file of these remaining payments?

Tip: Your CRM should determine the schedule of payments for each member. Ideally, your Direct Debit provider should handle both types of payment plans. 

Tip: If you have real time integration that notifies your CRM system as soon as a mandate’s status is changed – this is going to immediately reduce failed payments.

Also, consider whether your DD provider can offer automated retries if a payment fails the first time.

Tip: Your provider should turn the complex coding of the BACs system into plain English. This should be through the API to your CRM where you can make dashboard, alerts and reports.