Why is setting up Direct Debits for customers so hard?

[Frimley111R]

We're trying to offer customers the option to pay in instalments but, for reasons that seem beyond me, our bank won't allow us to set this up. They said basically that we're too small to bother with (nice!). Another DD bureau seemed keen and then came back with a short 'No', no explanation.

What am I missing? Why can't a business set up a DD process? Surely that a basic requirement of a lot of businesses?

[williamp]

A dd is them allowing you to help yourself to funds from their account. A HUGE potential fraud issue if the wrong company is allowed to do this.

So the banks are very careful who is allowed to be a dd originator. And yes, you are too small...

[WinstonWolf]

Not sure it's any use to you but we get our customers to pay by Standing Order. It achieves the same objective but requires you to check everything has come in on time.

[Frimley111R]

Just had a really useful chat to a company who are a DD bureau. They said the DD guarantee is a big problem. Customers can basically claim all their money back on anything paid by DD almost whenever they want, up to years after buying something. So, our business could go under and they could then be hit with a load of claims for high value items. As a result they don't want to take the risk.

I did ask about SO and they said they are good but rely on the customer paying us rather than us taking money from them which looks like our only option.

[Frimley111R]

WinstonWolf said:

Not sure it's any use to you but we get our customers to pay by Standing Order. It achieves the same objective but requires you to check everything has come in on time.

It absolutely is, see above. Have you had any payment issues or challenges with this? PM if you need to.

[WinstonWolf]

Frimley111R said:

WinstonWolf said:

Not sure it's any use to you but we get our customers to pay by Standing Order. It achieves the same objective but requires you to check everything has come in on time.

It absolutely is, see above. Have you had any payment issues or challenges with this? PM if you need to.

I have long term business customers and it works for us. Basically we get paid without having to invoice and chase. Occasionally we don't receive payment but in terms of maintaining cashflow it's a winner. The customer pays us on the 1st of the month, we check the money has gone in and we're good to go. If you're missing a payment you can start chasing right from day one and you're not getting paid in arrears

[nekrum]

https://gocardless.com/

[Frimley111R]

nekrum said:

https://gocardless.com/

They are the closest to what we want but we'd soon exceed their maximum limit on monthly transaction values.

[miniman]

PayPal recurring payments should do what you want.

https://www.paypal.com/pdn-recurring

[uber]

Frimley111R said:

They are the closest to what we want but we'd soon exceed their maximum limit on monthly transaction values.

They will up it on request

[Altrezia]

Stripe is worth a look too. Worldpay too. Most payment people can do monthly payments now.

[technodup]

Frimley111R said:

WinstonWolf said:

Not sure it's any use to you but we get our customers to pay by Standing Order. It achieves the same objective but requires you to check everything has come in on time.

It absolutely is, see above. Have you had any payment issues or challenges with this? PM if you need to.

We've been through the same process recently- basically told to ps off because we're not as big as Vodafone.

I was enquiring because we have a lot of clients paying monthly SOs and it involves at lot of chasing twice a month (we have two payment dates per month). Cancelled SOs, no funds, banking 'errors' etc etc. Some genuine, some less so.

We wouldn't rely on them setting up the SOs so we/they fill out a mandate and we get it to their bank. Most banks process these centrally and check with the client it's genuine but this process is long winded and remote and as such is prone to error. It's been known for us to submit three copies before it's actioned which is a ballache for us and the client as we're back to them each time for a signature. It's a ballache all round, hence I was looking for a better solution. Not found it yet.

[WinstonWolf]

technodup said:

Frimley111R said:

WinstonWolf said:

Not sure it's any use to you but we get our customers to pay by Standing Order. It achieves the same objective but requires you to check everything has come in on time.

It absolutely is, see above. Have you had any payment issues or challenges with this? PM if you need to.

We've been through the same process recently- basically told to ps off because we're not as big as Vodafone.

I was enquiring because we have a lot of clients paying monthly SOs and it involves at lot of chasing twice a month (we have two payment dates per month). Cancelled SOs, no funds, banking 'errors' etc etc. Some genuine, some less so.

We wouldn't rely on them setting up the SOs so we/they fill out a mandate and we get it to their bank. Most banks process these centrally and check with the client it's genuine but this process is long winded and remote and as such is prone to error. It's been known for us to submit three copies before it's actioned which is a ballache for us and the client as we're back to them each time for a signature. It's a ballache all round, hence I was looking for a better solution. Not found it yet.

I've had good success with getting them to set it up themselves then sign a form saying they've done it at the start of the contract. It might not work for everyone but it works for us.

[uber]

Worldpay has a product which is the same as Stripe but far cheaper (if you are already a customer). Before it used to take us weeks to integrate card terminals, now its hours

https://online.worldpay.com/features

[MrDan]

Try www.eazycollect.co.uk

but I completely agree its a nightmare.

[akirk]

agree with the above - gocardless is the simplest I have seen - maybe worth checking with them regarding the limit

[Frimley111R]

MrDan said:

Try www.eazycollect.co.uk

but I completely agree its a nightmare.

They use direct debits so its a no from then. Looking at Paywhirl atm too. (Worldpay has a shockingly ancient website btw)

[Big E 118]

I went through this about 2 years ago. Neither of the banks we hold business accounts with were interested.

We went with https://www.eazipay.co.uk/ and have found them to be very good.

All my clients are on DD now and it's written into their contracts. I haven't had to chase an invoice in two years!

[technodup]

Big E 118 said:

We went with https://www.eazipay.co.uk/ and have found them to be very good.

Had a very quick look at their site- am I right in thinking they act as a middleman between those (like us) who cannot access DD facilities and the end customer? Allowing businesses to take DDs via them?

For 40p per transaction?

[Big E 118]

technodup said:

ad a very quick look at their site- am I right in thinking they act as a middleman between those (like us) who cannot access DD facilities and the end customer? Allowing businesses to take DDs via them?

For 40p per transaction?

Yep, correct.

There are other charges for setting up new DD's, new payment instruction and for withdrawing DD's if you've made an error. We have a pretty stable customer base so it works for us.

Edited by Big E 118 on Tuesday 6th October 10:15