Paperless Direct Debit has revolutionised the payment process for many organisations. A Direct Debit Instruction can now be implemented without the need for paper instructions. The relevant details can be captured by using one of the following methods:
- telephone touch-tone keypad
For a full description of the rules for Paperless Direct Debit, Originators will need to consult with their Sponsoring Bank and in particular refer to Section 16 of "The Originator’s Guide and Rules to the Direct Debit Scheme". However, please find below a brief summary of the main requirements for an Originator to implement Paperless Direct Debit:
- an Originator must have live AUDDIS (Automated Direct Debit Instruction Service) status for the lodgement of Direct Debit Instructions.
- you must complete a separate application for each Bacs Service User Number joining.
- approval must be sought from the sponsoring bank for all Paperless Direct Debit material, including scripts, confirmation letters and, if applicable, internet screens.
- a further Paperless Direct Debit Indemnity, obtained from the sponsoring bank must be executed.
- for telephone Direct Debit, a set script must be followed and for Internet Direct Debit, set screens must be used - examples of both are published in the Paperless Direct Debit marketing pack available from the sponsoring bank.
- mechanisms for confirming the Paperless Direct Debit sign-up should be implemented such as Voice Recording or internet Audit Logs.
- the Payer’s address must be verified by reference to an existing database or an external database of addresses.
- the payer’s account details must be validated by applying Modulus Checking. It is strongly recommended - indeed some sponsoring banks are insisting - that this check is undertaken at point-of-sale, with the customer still present or online.
- the actual Sort Code must be checked using a current and valid sort code database.
- for Internet Direct Debit, the bank or building society branch address details must be captured. As the details will be keyed directly into a web page by the payer themselves, this puts even greater emphasis on developing comprehensive online validation, since there will no longer be the opportunity for a trained operator to pre-empt and avoid some of the common problems.
- if applicable, the rules relating to the debiting of building society accounts must be followed.
Benefits of Paperless Direct Debit for Originators
- Allows Originators to take full advantage of more efficient sales channels such as telephone call centres, telephone touch-tone technology and the Internet
- Convenient, safe and popular with customers resulting in increased sales - Originators using Paperless Direct Debit have reported an increase in sales of over 25% compared with paper DDIs
- Reduces the time to start the collection process - potentially down to eight working days
- Eliminates significant paperwork, administration and postage
- Less expensive and more flexible than credit card payments which remain the dominant paperless payment method
Further information can be found on the Bacs website.