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Introduction to taking payments with Direct Debit

Chris Hooper
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Last editedApr 20231 min read

The three things you need to know about taking payments with Direct Debit.

Once you have a Direct Debit Mandate set up with your customer, you can collect Direct Debit payments from them at any time. There are three things you need to know about taking payments with Direct Debit:

  1. You need to give customers advance notice. You need to give your customer 10 working days notice of the amount and date of the payment unless you have agreed a shorter notice period. To help you check whether you are giving Advance Notice correctly we have put together six quick questions for you.

  2. Payments clear in 3-5 days. When you’re ready to charge a customer simply submit a payment request to your bank via Bacs. How you do this will depend on your chosen Direct Debit provider – if you would like to find out more check out our guide to the three different options.

    Remember: Direct Debit payments are not instant; the Bacs three day cycle means they generally settle into your bank account after 3 working days. 

  3. Bacs will send you any failure reports. You will receive a message notifying you of the reason for the failure. You will then need to speak to your customer to resolve the issue (in GoCardless's experience this is usually due to insufficient funds). If you start managing Direct Debit payments in-house you are likely to have issues initially with unnecessarily high failure rates. Using a third-party provider like a bureau or GoCardless can help with this.

How to collect Direct Debit payments with GoCardless

1.

Create your free GoCardless account, access your user-friendly payments dashboard & connect your accounting software (if you use one).

2.

Easily set up & schedule Direct Debit payments via payment pages on your website checkout or secure payment links.

3.

From now on you'll get paid on time, every time, as GoCardless automatically collects payment on the scheduled date. Simple.

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GoCardless takes all the hard work out of Direct Debit

GoCardless processes Direct Debit payments on your behalf, including:

  • Giving your customers advance notice - GoCardless sends customers a bank approved notice of each payment three days before a debit is made giving you more flexibility around collections.

  • Optimising payment timings - GoCardless submits mandates and payment requests for you according to our optimised payment timetable. You simply request payments in our online dashboard or via the API and we’ll do the rest for you. 

  • Handling any failure reports on your behalf - We receive reports from the bank and update your payment statuses so you know what's going on. GoCardless manages any payment failures for you and our simple system reduces failure rates to less than 1%.

Want all the benefits of Direct Debit but without all the hassle & expense of dealing with banks?

GoCardless does all the heavy lifting for you so you can collect payments on time every time with just a few clicks!

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Now that you know how taking payments with the Direct Debit system works, you’ll need to decide how to access it. There are three options for doing so - the one you choose depends on the size of your business and your requirements. To find out more, check out our 60 second Guide to accessing the Direct Debit scheme.

GoCardless makes it easy to accept Direct Debit. Automate payment collection. Reduce manual admin. Get paid on time, every time.

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Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

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Try a better way to collect payments, with GoCardless. It's free to get started.

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