Accepting Direct Debit payments

DCodd

Talk to your Bank, you will need a Business Bank Ac which unless you are offered fee free banking, will incur charges for cashing chqs etc as well as DD fees. You will also have to be compliant with the DD Guarantee conditions too.

As I said, speak to your Bank.

Willman_Rodders

Setting up a direct debit system is not for the small businessman. The banks will need security to protect them against errors and fraud; it used to be in excess of £100,000 minimum when I worked a Bank many years ago - but I don't know what the figure will be today.

If you make a mistake in claiming (e.g. wrong day, or wrong amount or even wrong account) which results in the bank's customer paying charges as a consequence it is you (the DD originator) that pays those charges, and compensates the bank for all its complaints. It becomes a very expensive business.

Stick with standing orders and a good accountancy program is my recommendation.

morgani

Have been looking at this recently. Their are many different companies all calculating their charges on different basis.

Have a look at Fastpay as for me and my circumstances I cannot find anyone that can beat them on price. I cannot however comment on their service as I haven't used them.

i3r4dl4d

I've found 3 companies. Looked into all 3 and had some quotes.

fastpay - cheaper setup at £175 but more expensive in the long run. (not your name on customer statements)
charge £5 to submit a file containing an unlimited amount of new customers.

eazipay - Expensive setup £475 (I knocked them down to £350) and cheapest in the long run. (shows your company name on customer statements). Charge £1.50 for each new customer.

smartdebit - £350 setup fee and charge £35 per month including all fees for setting up new customers - wouldn't negotiate.

All charges 40p-60p per debit and charge vat on all fees.

I am going to try fast pay. They are cheapest and I can just submit a batch of all new customers every month so it only costs us £5. Once your customer base grows they have flat rate packages whichs wave you more money and for an additional £250 you can upgrade to the corperate package to get your own SUn which puts your name on customer bank statements.

BenHippynet

I know this is an old topic, but I thought I'd give some feedback in case anybody else found the thread looking for information.

I use GoCardless for my web hosting business, and after telling my personal trainer about it he takes payment from all of his clients through it.

1% of each transaction up to a maximum of £2. No sign up or monthly fees.

Pound-Of-Flesh

It is an old topic - which I also have just stumbled across. And for the benefit of anyone else needing info on this topic, here is my contribution.

First a Warning - most of the answers above are highly misleading!!! (Maybe they were valid answers 5 years ago - but certainly not now).

It is true that it is not easy to get approved by BACS to be an "originator" of DD credits. I.e to be able to submit a transaction file into the BACS DD system that will extract money of variable amounts from people's bank accounts. It's obvious why - it would be a fraudster's dream.

BUT there are plenty of bureaux which will act as middle man for a small business wanting to process DD's. You send your files to them, and they submit them into the system. Then they receive the money, and pay it into your bank account. You pay them various fees which depend on the bureaux (or rather they deduct the fees before paying your money). The payment into your account is done as a BACS transfer, so you should not incur additional charges from your bank. (From your bank's point of view you are not processing DD's at all - just receiving a regular large payment).

There are lots of these bureaux out there - some already mentioned above.
Some will display their name on the customer's bank statements, some will display your name. (Probably at an additional cost). As I understand it this is NOT the same thing as requiring you to get your own SUN (but not 100% sure of that point).

I hope this is helpful to someone one day.

dean99

Just a quick update to let you know i run a vehicle tracking business and collect subscriptions using GoCardless but initially i found it a real pain creating invoices for the payments i collected but then i found a company called invoice365 which still uses GoCardless but now it automatically creates and emails invoices to clients each month and collects the payment by direct debit. Brilliant!

If you google invoice365 you will find them. Hope this is helpful to others!

redfox05

Just to say, fantastic updates. As I was reading the old messages from years ago, I thought it seemed a bit outdated and did not match my research on google.

Yes, its a very old thread, yet... its still one of the first to pop-up on google. So thank you for those who updated the thread. I know on some forums you get bashed for that, but I think this is better. Why post a new thread when you can update an old one and keep it all together in one place.

I'm thinking of GoCardLess, but then again, also want more opinions on the info that Willman Rodders posted above, about you being liable for any mistakes, complaint costs the bank get etc etc. Would that still be the case when using a middleman such as GoCardless?

I'll do my own research on it if noone knows, but thanks for all the useful info so far on here!

TheTracker

If you have enough volume I suggest using a more feature rich front end to Go Cardless like Directli, which is GoCardless behind the scenes.