Thinking about changing your Direct Debit provider?

Here’s a guide to help you figure out whether the time is right


Should you change Direct Debit provider?

Changing your Direct Debit provider can be a tricky decision. If you were wondering whether it’s worth it, wonder no more. We walk you through the most important factors to keep in mind.

1. How satisfied are you with the time it takes to manage your Direct Debit payments?

With the right Direct Debit provider, you can reduce admin time to a few hours per month. But if manual processes are still required, it could be worth changing to another provider with fully automated systems, saving you even more time on processes such as reconciliation. Time is precious, why waste it on complicated admin?

2. What about your current mandate set up method - are you happy with it?

Direct Debit payments can be set up on paper, online or over the telephone. Perhaps your current provider doesn’t let you use your preferred set up option, or charges you extra to do so. However, most customers these days expect to set up their Direct Debit online. So it makes sense to choose the provider that offers the best range of online Direct Debit services.

3. What about fees - how satisfied are you with those?

Typical Direct Debit bureau charges include a hefty £400 - 800 setup fee on top of transaction charges, along with a range of fees for new customers, payment batches, retrying payments, chargebacks and API access. Plus, if your company wants to handle Direct Debit directly with a bank, you’ll need to pay a substantial bond upfront, usually in the £50-500k range. In contrast, GoCardless charges just 1% per transaction, capped at £2. Also, we have no set up fees and absolutely no hidden charges.

4. Do you know what the process of setting up Direct Debit with your bank involves?

To manage Direct Debit payments without a third party provider, you’ll need a Service User Number (SUN). To get one, most banks require your business to have substantial revenues (at least £1 million). The whole process takes around 4-12 weeks. But with GoCardless, we can set up a dedicated SUN for you, or you can use our master SUN. The process is free of charge and quicker than going through a bank.

5. Are you happy with payment limits or other restrictions?

Most Direct Debit providers impose a transaction limit of £800 per customer, per month. GoCardless offers a standard limit of £5,000 per transaction, which can be lifted with some simple checks. Many bureaus also hold back a percentage of clients’ funds each month to cover their risks. If your business is small, or very new, this figure could be as much as 30% of your funds. With GoCardless, we give you the best of both worlds. You can either use our master SUN to collect funds, or we can set up a dedicated SUN for you. Most importantly, we’ll never withhold any of your funds.

6. Does your current Direct Debit provider integrate with your existing platform?

Integrating your systems avoids the hassle of manually entering and reconciling data each month. If your current Direct Debit provider doesn't offer an integration with your favourite accounting, membership or billing platform, why not make life easier and find one who does? GoCardless integrates with all the major online platforms including Sage, Xero, QuickBooks, Zuora, and Kashflow. Or, you can use our API to create your own custom integration.

7. Does your current provider send you clear, detailed and instant reports?

Comprehensive, clear and speedy payments reporting makes your business life so much simpler. Most Direct Debit providers will simply email you a report with a series of cryptic messages detailing any payment failures. These messages can be difficult to interpret, causing wasted time and extra stress. With GoCardless, you receive automatic real-time notifications of any failed or cancelled payments, along with chargebacks and cancelled mandate notifications. You can then act immediately to solve any issues. GoCardless also gives you the ability to filter and export all your data on customers, payments, events, and payouts in a convenient CSV format for ease of reconciliation. What could be easier?

8. Are you happy with the number and frequency of payment runs available?

Most Direct Debit providers limit you to one or two payment runs per month. They may also charge additional fees to add new payment dates. This can impact your cash flow, invoicing and reconciliation processes. With GoCardless, we allow you to submit payments as often as you like, whenever you like, at no extra cost.

All things considered - should you switch Direct Debit provider?

Payments are central to your business success. Your Direct Debit provider should make the process easier, quicker and more affordable. If yours doesn’t, then why not consider making a change?

Still not quite convinced? Check out our guide to switching to GoCardless.

Interested in collecting recurring payments?

GoCardless makes it simple to collect recurring payments for businesses of all sizes

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