Make and collect payments using Bacs, Faster Payments, Direct Debit and Open Banking. Manage cash flow, invoices, remittances and protect your business from fraud.
There are many different providers and offerings but how do you make sure that you pick the right one for you?
Start by making sure that your chosen partner is capable of supporting your current and future business objectives. A good partner will seek to become an extension of your team, so that you can rely on them to deal with all the complexities of managing Direct Debits, without having to hire someone to do it for you. This saves you time and money to put back into your business.
The following checklist will help you to benchmark providers and establish clear points of differentiation in drawing up a shortlist. This focuses mainly on the service provided, but you must also consider the reputation, financial stability, experience, the availability of value-added services, along with total and on-going costs. Can they support you through the growth of your business?
As a small business, using a Direct Debit provider who can sponsor you onto the Bacs Direct Debit Scheme makes a lot of sense. However, it is worth asking whether it will be your name appearing on your customer’s bank statement. This is determined by a Service User Number (SUN) and whether you can own and brand it yourself.
A fully branded solution helps you to deliver a consistent user experience for your customers across all payment channels. This includes a branded website page either hosted by the provider or have they an option to use an API for your customers to sign-up to online? Does your company logo appear on a paper mandate and customer communications?
By using a fully branded SUN, with your company name appearing on your customer’s bank statement your customers can easily identify who has collected payments from their account and helps you to build that all-important trust with them whilst reduce cancellation numbers.
When looking to start collecting Direct Debits, be aware of dated locally-installed software.
Managing the entire lifecycle in the cloud is the most efficient and secure way to take payments. It enables multi-device, multi-browser and multi-user access. It gives you the flexibility and agility to adjust to the needs of your business. There is no long-term investment in software or on-going maintenance. Flexible payment options based solely on your transaction volumes can also be cost-effective.
Most leading providers will be offering you a solution that is based in the cloud, and this should be a prerequisite
If money is the lifeblood of an organisation, it stands to reason that protecting your ability to receive payments is vital to ensure your cash flow and financial health are free from unnecessary risk. Carefully scrutinise the security measures in place around the Direct Debit solution.
What measures safeguard your business payments, to reduce the risk of error or fraud, and the impact of a malicious attack? Look for robust business continuity that ensures minimal disruption should an unforeseen event happen.
Make sure you only select a Bacs Approved Bureau and more importantly choose an accredited Facilities Management provider when looking to access the Bacs Scheme and receive your own SUN. A list of these are available on the Bacs website. Alternatively, look for providers displaying the Bacs Approved Bureau logo.
For a higher level of assurance look for a provider that is FCA regulated and works to internationally recognised ISO 9001 standards. You can also look out for providers who have been awarded the status of an Authorised Payments Institute under the Payment Services Regulations 2017 (PSRs). Through the PSR directive, the European Commission aims to improve innovation, reinforce consumer protection and improve the security of internet payments and account access within the EU and European Economic Area.
Authorised Payments Institutes have to prove they have robust security measures in place to ensure safe and secure payments, and they are protecting the confidentiality and integrity of customers’ security credentials, assets and data. The latter is vital under the latest General Data Protection Regulation (GDPR) legislation.
To gain this status, bureaux are required to undergo a stringent initial approval process and regular ongoing inspections by Bacs to ensure confidentiality, integrity, security and availability standards are in place.
Do they have a contingency plan in place? Robustness and resilience should feature high on your list of evaluation criteria. Ask about the contingency measures. What would happen in case there is a fire at their premises or a sustained power cut?
A good contingency plan should include:
Multiple internet providers
Regular full and incremental backups
Multiple offsite data centres
Reassurance that you will receive your funds on time, every time
A Bacs Approved Bureau will undergo an inspection, usually once every three years. Bacs Inspectors will assess the business’ standards of security, technical competence and operational integrity. There are five key areas that are evaluated:
Bureau Organisation and Financial Information
Applications and Systems Support
Bacs Processing and Operations
Following the inspection, the bureau will be given a quality score ranging from poor to excellent. It makes sense to only shortlist a bureau if it has received a good rating – why settle for anything less.
Once you have decided to go with a particular provider, how quickly can they help to get you set up? All businesses should go through credit checks and company vetting by the Direct Debit provider before you can be accepted onto the Bacs Direct Debit Scheme.
Look for a provider who routinely carries out these checks up-front and can quickly get you set up on their Direct Debit solution. Your provider should help you to understand what is involved and hand-hold you through the onboarding process, so you feel reassured you can start collecting payments without any delays.
Ask your provider how long will it take before you receive your funds from the Facilities Management Provider? Does the provider hold on to them for any extended period of time before they reach you? Some can remit instantly, but some providers hold on to your money in case there are any failed payments before sending you the funds.
When choosing a Direct Debit solution, you should always have the customer experience in mind. How and where do your customers like to buy?
Ideally, you want to be able to offer a consistent customer experience across multiple channels – online, mobile, offline and in person. You want a Direct Debit provider that can provide the following combination:
Online: a branded and customised data collection form can appear as an integral part of your website. A link to this hosted webpage can then be embedded into your customer onboarding emails or text messages.
Paper: there are many cases where customers or charity donors will prefer to fill out a paper mandate. Make sure you can brand the physical form with your logo for brand consistency and ensure the wording is compliant with BACS rules.
Paperless is definitely the way to go. Many of your customers will prefer it as it is quick and simple to set up. It also gives you lots of additional benefits. You can validate customer’s banking details at the point of data entry to ensure correct and accurate information is submitted to Bacs, which reduces potential collection failures.
Phone: if you onboard a customer over the phone, your team can fill in your hosted Direct Debit form for the customer and send them an automated summary of the Direct Debit mandate. Once again, your customer’s bank details will be validated as your team fills in the form, minimising the risk of costly Bacs rejections.
Look for a vendor that will support and guide you throughout the setup, e.g. provide you with Bacs approved scripts to make sure they are compliant with the Bacs Scheme.
Outsourcing your Direct Debit collections to a third party means trusting them to manage the entire collections process for you. So, doing your research on the available providers and finding out what level of support they provide you is crucial, you would want to feel reassured that you are in safe hands if you have any questions. This support should start when you agree to sign up and continue long after you have gone live.
Where is the customer support team based? Will your call be routed to an overseas call centre or is friendly support available from a local customer support team? Do they have the required Direct Debit Scheme training to give you the right answers, when you need it most?
The ability to connect your Direct Debit solution with your accounting software, such as Xero and Sage50 or your CRM platform, will help you run a lean operation. To get the maximum benefit, look to eliminate manual steps wherever possible in the Direct Debit lifecycle.
Many businesses look to collect payments via Direct Debit to get better visibility of money coming in. Without good reporting functionality within your Direct Debit solution, you are still working blind when it comes to knowing who has paid and who hasn’t. This is key when you are looking to forecast future income, so you can invest back into growing the business.
Reporting capabilities should be a top priority when assessing a provider. Make sure you have a clear idea of what you want to report on and how your Direct Debit solution matches up to that. Is the reporting function robust enough for your business needs? Ask your provider to demo the solution and make sure you can evaluate how the reporting works.
Direct Debit solutions can vary in terms of cost and availability of services. In order to keep costs down, some providers will impose limits on the collection dates, the number of collection runs per month and the amounts collected. Without this flexibility, you may find future business opportunities restricted.
In addition, you should consider the largest amounts that you will typically collect from your customers and confirm that your provider can accommodate this. Some providers will limit you to £5,000 per transaction, which could rule out some of your customers from signing up to Direct Debits.
Now you are armed with the right questions to ask during the selection process, why not try them on Bottomline? We can talk you through the 10 reasons we believe what we offer is different and give you an in-depth demo of our solution.
If money is the lifeblood of an organisation, it stands to reason that protecting your ability to receive payments is vital to ensure your cash flow and financial health are free from unnecessary risk.
This has a negative impact on your work-life balance. There’s no such thing as a day off and you spend holidays sneaking off to reply to emails and take calls.
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