Monthly Archives: February 2019

Advance notice is one of the fundamental protections afforded by the Direct Debit guarantee. It ensures that you provide your customer with a notification when:

 

Failing to provide advance notice will put you in breach of the Direct Debit scheme. As you can probably guess – this is somewhere you don’t want to be.

On the one, much more lenient, hand, your customer will be entitled to a full and immediate refund. On the other, you’ll find yourself the subject of unpleasant sanctions.

Save yourself a big black mark and get savvy on advance notice.

How advanced is advance notice?

You should be providing your customer or client with 10 days advance notice before a payment is taken from their account. Whilst you can agree a shorter period between you (keep a signed record if you do), 10 days only include working days and does not take weekends or bank holidays into account.

If you take fixed payments, you can send one notification with details of the payment frequency and amount i.e. £50 on the 1^st of every month. But if there are any changes to this, advance notice must be resent according to the above rules.

What to include in advance notice

Advance notice must contain information on the following:

 

Remember – Take care not to overload your customers with too much information to the point that it is either irrelevant or nonsensical. Be clear, concise and most of all, pertinent.

Do I need to worry if a payment comes out too late or too early?

There will be times when a payment doesn’t come out on the date stipulated in your advance notice. But don’t worry – you have three days grace on or within the specified date.

How to send advance notice

In line with the updated Service User Guide & Rules to the Direct Debit Scheme, it is a prohibited practice to issue advance notice through your website. Effort must be taken to contact the customer directly. Advance notice can be provided in writing, electronically, or orally (oral should only be taken as a last resort as it isn’t recordable or traceable). Formats include letter, invoice, statement and email.

Tip: make sure you are sending advance notice to the CORRECT person. This is the person whose account you will be taking money out of. It’s not necessarily the customer.

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A payment gateway is the easiest way to make online sales. But in order to implement a payment gateway, you need to know a little bit about what a payment gateway is and how to find the right one for your business.

At DFC, our payment gateway is purpose-built for Direct Debit transactions, but there are multiple functions a payment gateway can satisfy, from retail sales to the sending of electronic checks – even refunds are possible.

What is a payment gateway?

The term ‘payment gateway’ can seem a bit ambiguous for those who are unfamiliar with it. But the concept is relatively simple. A payment gateway is simply an e-commerce application that authorises and processes financial transactions.

It’s essentially the online equivalent of someone going to the till to pay (hence why you’ll often see the pre-purchase page labelled as your shopping basket).

For example: if a customer wants to buy a bicycle through an online sports store, a payment gateway will enable them to enter their credit card details and purchase the bike without having to move from the comfort of their sofa.

 

The payment gateway process

The process of making an online purchase can take less than a minute. However, to be deemed complete, the transaction must go through four stages

Purchase	Verification	Approval	Transaction
During this stage, the customer will choose to make a purchase, hit the ‘place order’ button and enter their credit card details and billing info	The information is then routed to the customer’s bank account through a secure connection, ready for approval of the transaction	The bank approves or denies the transaction. Whatever the outcome, a response will be pushed back to the payment gateway	If approved, the transaction will be verified by the merchant’s bank. The payment can take anything up to 21 days to arrive but more often than not, the transaction is instant

 

What do you need to consider when choosing a payment gateway?

Speed

In the age of instant gratification, this is more important than ever. People get bored easily so the process should be as quick as possible. Speed can be dictated in two ways:

 

The payment process should take no more than five minutes from start to finish.

Navigability

Poor user experience will result in your customer pressing the back button. Information must be clear and easy to follow. Consider the following before making a decision – are bugs a regular problem? Does the payment gateway look trustworthy? Can it be white labelled?

 

Security

We’re now well on a roll with GDPR and there’s been no shortage of breaches littering the news. We don’t need to tell you how important it is to offer protection and security for your customer’s personal data – particularly financial.

Make sure that the payment processer is level 1 compliant with the Payment Card Industry Data Security Standard (PCI DSS). Customer data must be secure during bank-to-bank transit and the payment gateway should house fraud detection tools, such as tokenisation.

 

Hosted or non-hosted

A non-hosted gateway should sound like an automatic win, but it means that the buck stops with you. It’s a time-consuming process that requires you to become PCI DSS compliant.

A hosted gateway will usually be hosted by a payment bureau. This reduces the risk of storing and transacting cards or payment information. Because the bureau will already be compliant, it saves you having to make the effort.

 

Integration

Your chosen payment gateway should be able to easily integrate with your CRM platform. If you want to use a hosted gateway, then the integration process can happen without your involvement, as your supplier will be able to handle any communications with your CRM supplier themselves

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DFC is a leading Revenue Solutions Management Solutions provider, handling Direct Debits for thousands of happy customers across the UK.