Benefits of Setting up Direct Debit for Payment Collection  

Direct debit payments are simple and accessible at any time. It requires settling up direct debit instructions, notifying your customers, and depositing the payment requests to your bank correctly.

You can also set up a direct debit instruction through secure online banking, via a phone call, or a by filling a paper-based direct debit instruction form. It will let you collect direct debit payments from your customers at your required date without investing in lots of time to do the same.

Moreover, you will need to submit payment requests through the bank and notify your customers beforehand. Once initiated, a direct debit may take some working days to complete the process.

Notifying your customers

Make sure to give your customers an advance notice before collecting a direct debit payment from them. Agreeing on a fixed amount is a must to take regular payments. However, if the due payment varies in amount or frequency, you will give advance notice to every customer, that will contain the payment date and amount.

Submitting payment requests

Direct debit payment collection entails making payment requests to the bank. Every payment request will route to your sponsor bank and your customer’s bank. Your bank will credit your account on the payments’ due date while your customer’s bank will debit theirs. The two banks will then settle up the transactions between themselves.

Post submission convenience 

After you submit a payment request, it takes some working days to notify you whether or not your payment is successful. A successful payment will come into your account and vice versa.

Indemnity Claims 

With the direct debit guarantee, your customers can request a refund for the direct debit payments made from their accounts at any time. Although only 0.2% of direct debit payments receive refund requests, you must understand the process to be in the loop.