Direct Debit Originator Services?

[Gordon N]

I am sure someone on here will be able to help me with this one...

I would like to offer a direct debit option for my monthly paying customers, standing orders and cheques are proving a little unreliable. I have a business account with Abbey who state in the account documentation that they do not offer a DD Originator service.

Having had a quick scan around the internet there appears to be a few 3rd party originator services available, but I have no idea what I should be looking for in a provider.

Can anybody offer me some tips on things I should be aware of or look for, or better still recommend a service provider they have successfully used?

 

[Scottish Business Owner]

Hi Gordon,

Getting originator status yourself will prove difficult as it's normally subject to various volume levels before they will even entertain it.

I've heard good things about :: Direct debit UK collections - Eazipay services and solutions and actually know a few people who use them currently who seem quite positive about them.

There are other providers i'm sure but just be sure to make sure you read the small print for any hidden charges etc!

 

[Boxby]

It is also very expensive. 50p per transaction, and 50p per variation, were quoted to me before the banks went topsy. So if you have 200 customers and their invoice amount changes each month, then thats £2400 in fees alone each year.

I would recommend instead that you investigate a continuous authority payment option with either worldpay (theirs is called futurepay). or Sagepay who i know also do it.

 

[Scottish Business Owner]

It is a very competitive market now Sandra which has meant prices have fallen a fair bit. It's still a fair point to make sure you check you are fully aware of all fees etc becuase there will be a level where this just isn't economical to implement.

Could call on the continuous authority thing as I didn't know this was an option

 

[Tim Barlow]

I would have gone with easipay but they wanted an unlimited personal guarantee, something I was unwilling to do due to the nature of the DD guarantee.

AllPay.net were more expensive but I only had to put a relatively small bond down.

Standing order is definitely the way forward if your monthly payments don't change as once the money is in your bank, you are in control. With DD a customer can demand their money back at any time and they will get it back. It's then down to you to prove that they owe it to you (can be problematic). Be aware that it isn't just about the most recent payment, they can go back years.

It comes down to risk - if your business will be unaffected by one customer reclaiming their payments for as long as they have been doing business with you, then no great problem. If however one customer doing that could bankrupt you, think hard.