Accepting Direct Debit payments

yummymummy79

Just wondering if anyone with a small business accepts regular payments by direct debit, how do you find it works and are the costs manageable?

I'm in the process of setting up my own business where the clients sign up to a regular monthly service, so need to think about ways of getting payments for this which are reliable, cost effective and easy. Obviously there are other options like collecting cash/cheque every month, payments by BACS/Paypal/Standing order etc but I'd like to be assured that when they sign up to my service, they are going to be paying for it, without me having to constantly chase them!

borders_dude

yummymummy79 wrote: »

... but I'd like to be assured that when they sign up to my service, they are going to be paying for it, without me having to constantly chase them!

Unless they have no money in their account in which case it may not go through!

ukbill69

What type of business are you operating?

yummymummy79

Obviously if it bounces then there will have to be alternative action/options!

Not sure the type of business makes a massive difference, but it's a kind of health/fitness mentoring.

yummymummy79

Any more opinions / experiences?

PlutoinCapricorn

Do you know what accepting payments via DDs would involve? You may need a special business bank account that accepts DDs. You may like to take a look at the following:

http://www.smallbusiness.co.uk/channels/small-business-finance/news/19667/the-facts-on-direct-debits-and-standing-orders.thtml


www.businesslink.gov.uk is a source of free information and advice.

I prefer to use Standing Orders myself as a customer, except when there is no SO option or there is a discount. I prefer to be in control of what goes out of my account. I would never authorise a new, unknown service provider to take money from my bank account.

yummymummy79

I don't know a great deal about it which is why I was asking! Saw some of these companies that charge 35-50p per transaction to set up and take a DD so wondered if anyone had used them or anything similar.

I'll probably end up going with cash/cheque/SO to start with anyway, was just looking into other options a bit further down the line.

jamesdrew

You can only receive direct debits set up by the receiving business bank account, however your clients can go to their bank and arrange a monthly standing order to any bank account. Down to you I'm afraid in deciding which payment methods to offer your clients. Do what is best for you. Good luck . . .

paulwf

Paypal have monthly billing options...not sure of the details or even if it operates in the UK but thought it might be worth mentioning so you can do some more research if you are interested as it could be a very easy way to manage payments on a small scale.

Rolo_Tomasi

I think that as a new business you will struggle to set up a Direct Debit scheme. You usually need to be sponsored by your bank who will look at your trading history and the security you can give as they have to take responsibility for your direct debit activities. I also think that you need to be registered under BACS which I think costs £0,000's not £000's.

Your best bet is to look at the other options mentioned here.

yummymummy79

I realise that i can't do it on my own, I'm not that naive! I am mainly talking about the few companies I have seen that are the middleman and charge a fee per DD taken.