Direct Debit

Getting started

Once you have decided to introduce Direct Debit there are three steps.

Step 1 – Contact your payment service provider

The first thing to do is consult your bank. Provided you meet the required criteria, which involve checks for integrity, financial standing and administrative capability, you will be accepted onto the Scheme.

Your bank will advise you on the facilities you may need in terms of accessing the service and provide you with the Scheme Rules and procedural information necessary before you can offer Direct Debit to your customers.

Step 2 – Accessing the service

There are different methods for submitting your payment data to the Bacs service. The most suitable one for you will depend on your organisations needs and resources.

Direct access - this may be faster and cheaper than using a bureau where you will be processing a high volume of payments.

Indirect access - this is via a bank or bureau and is often the most suitable method for smaller organisations or those with a limited number of payments.

Step 3 – How it works

Once you have become a service user, you have a choice of two ways of setting up Direct Debit Instructions to collect payments from your customers, this can be done by taking paper Instructions or by using Paperless Direct Debit. You should also consider the additional services available that can help save on administration time and reduce costs.

To collect Direct Debit payments you submit your payment data - including amount of each payment, bank account numbers, sort codes and dates – via a bureau or direct access depending on which method you choose.

The data is sorted into payments to each of the banks and then transmitted to each institution. This data is downloaded into their computer systems and debited from the relevant customers' accounts and credited to yours.

The entire process is simple and efficient - and it takes less than three days from start to finish.

Bacs processing cycle

Input - day 1
Input day is the latest day a business user/bureau may submit a payment file to Bacs for a processing cycle. Payment files must be transmitted to Bacs between 07.00 and 22.30.

Processing - day 2
Files are delivered to the recipient banks which then process each payment.

Entry - day 3
Payments are simultaneously debited from the recipients' accounts and credited to your account.

You remain in control of the process at all times. You can submit your payment instructions up to 30 days in advance of the payment date. You can also recall payments after the payment information has been submitted, provided your bank is notified prior to a specific cut off time.

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