How to set up customers to use Direct Debit

Merchants often ask us for help getting their customers set up to use Direct Debit, so we've put together six simple steps that you can use to help them through the process.


Merchants often ask us to help them set their customers up to use Direct Debit. In this guide, we provide six simple steps to help you, the merchant, through the entire process.

By following these steps, our merchants have greatly increased customer sign ups, improved cash flow and spent less time on processing payments. To set customers up to use Direct Debit, we recommend you do the following:

1. Send advance notice of the switch

2. Send a Direct Debit request

3. Send a reminder for customers who haven’t signed up

4. Follow up by phone for customers who haven’t signed up

5. Address any customer concerns

6. Send a personal reminder to any remaining customers

If you're already using Direct Debit, our bulk change process allows you to easily transfer your existing customers to a new provider.

1. Send advance notice of the switch to Direct Debit

First, notify all your customers that you’re planning to use Direct Debit to take payments. Ask customers to tell you if they have any questions or concerns, so you can address these as soon as possible.

You can use the below email template to tell your customers you’re moving to Direct Debit. This step isn’t strictly necessary, but many customers appreciate being notified early.

Hi [name],

Here at [your business], we want to save you time paying us each month. So we’re moving all regular payments to Direct Debit.

Switching to Direct Debit will save you the hassle of manually paying each month. You’ll be notified of any upcoming payments, and you can cancel them whenever you want. What’s more, the Direct Debit Guarantee makes this the safest way to pay.

You will receive an [online/paper] Direct Debit Mandate form from us shortly. We would be grateful if you could [complete it/return it] by [due date].

If you have any questions, call us on [your phone number].

Regards,

[your name]

2. Send a Direct Debit request to all your customers

The below template provides customers with a brief explanation of what will happen and gives them a further chance to ask questions. You can use it to send the mandate form to your customers.

Hi [name],

Further to my email last week, we’re now moving your payments to Direct Debit. To set up your Direct Debit payment, please [complete this secure online mandate form/ return the enclosed mandate form] before [due date].

When you have done so, we will start billing you according to the agreed payment schedule. You’ll be notified of upcoming payments by [email/letter], and you can cancel them if you want.

Your invoice for this month’s work is attached. We will bill this against the Direct Debit once you have set it up.

Let me know if you have any questions.

Regards,

[your name]

3. Send a reminder to any customers who haven’t set up a Direct Debit

If you are still waiting to hear back from a customer a week later, you can use this template to remind them to return the mandate to you:

Hi [name],

This is a reminder that we would like you to set up payment by Direct Debit. Your invoice for this month’s work is attached.

We will bill you against this invoice once you have set the Direct Debit, so please [complete the secure online mandate form/return the enclosed mandate form] before [due date].

Let me know if you have any questions.

Regards,

[your name]

4. Follow-up by phone with anyone who still hasn’t responded

If some customers still haven’t set up an authorisation, it’s best to call them a few days before the cut off date. Explain what they need to do and how it will benefit them.

Our merchants have found that the following explanations work well:

  • Paying by Direct Debit saves time - you only have to do it once and we’ll do everything else for you
  • You can set up your payments instantly using paperless Direct Debit
  • You’re fully protected by the Direct Debit Guarantee, which makes Direct Debit the UK’s safest payment method
  • Direct Debit saves us admin time, so we can focus on giving you great service

5. Address any customer concerns

Some customers may still be reluctant to use Direct Debit due to concerns about control and protection. Direct Debit gives you control over taking payments from customers. But some people may worry that you could take the wrong amount, or take payment from them when it’s not due.

Here are some initial ideas for how to address customer concerns. For more details see our full guide to addressing customer concerns.

The Direct Debit Guarantee protects customers against unauthorised payments. This means that:

  • Customers must receive advance notice of the amount and date of each payment before it is taken
  • Customers can get a full and immediate refund from their bank for any mistaken payment, with no questions asked

For customers who still have concerns, you could try directing them to our payers’ guide to Direct Debit. This guide provides more detail about Direct Debit and the benefits it offers.

6. Send a personal reminder to any remaining customers

If any customers still haven’t set up a mandate, it may help to send them a personal reminder. The below template lets you resend the mandate so your customer can return the form to you without needing to search for it again.

Hi [name],

We spoke on the phone last week about moving your regular invoice payments to Direct Debit, but I noticed that you haven’t had a chance to fill out the mandate form yet.

[Please click the link below to set up your Direct Debit today, before your invoice due date on [due date].]

Your invoice for this month’s work is attached, and we will bill you against this invoice once you have set the Direct Debit.

Let me know if you have any questions.

Regards,

[your name]

GoCardless makes moving your customers over even easier

In our experience, the above steps help merchants to move customers over to Direct Debit quickly and easily. To make the process even smoother, we offer you the ability to:

  • Move your customers over automatically. If you’re already using Direct Debit, our bulk change system means that you can transfer all your existing customers over without them doing anything.
  • Add ‘Pay now’ links to your invoices. This allows your customers to click through to the GoCardless payment page directly from an invoice and set up the payment immediately.
  • Offer customers flexible payment dates. GoCardless lets you submit payments every day of the month which gives you the option of offering your customers more flexible payment dates.

Find out more about collecting Direct Debit with GoCardless

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