Paperless Direct Debit (PDD) lets businesses and organisations skip paperwork-heavy processes and to simply sign a customer up to the Direct Debit scheme online, face to face, or over the telephone.
Once the customer gives a business their payment service provider (PSP) account details, they can agree for a Direct Debit Instruction (DDI) to be set up.
Using the customer’s bank account number, sort code, and other relevant bank details, the customer’s sponsor bank sets up a regular Direct Debit from the customer’s bank to your account.
Since customers can sign up instantly online or over the phone, this method of setting up a Direct Debit collection involves far fewer manual processes. In fact, the data is entered directly into your database.
This means that the entire sign up process is sped up and simplified, which can save crucial administration resources.
How are Paperless Direct Debits collected?
As we’ve mentioned, there are a variety of ways in which businesses can collect Direct Debit mandates virtually.
The payer or customer gives their account details verbally over the phone to the Service User representative.
If there are any errors in the account details given, these can be checked whilst on the phone.
By doing this at the point of sale, businesses can avoid having to chase customers for incomplete Direct Debit forms, incorrect details, or failed set up.
What’s more, by speaking to the customer directly, you can build some relationships and address any concerns.
The payer provides their account details through an on-screen Direct Debit Instruction (DDI) which is sent via the internet.
This is the most convenient option for customers, as they can sign up for your services at any time of the day or night. This creates a 24 hour sales cycle and increases your profits.
You can also build in an automatic detail checking system which means that customers can’t progress if they enter the wrong details.
Face to face
Whilst this likely includes paper mandates (as customers must be offered a DDI form to fill out and sign), the business or a member of staff can also enter the details straight into a computer without the customer having to sign a paper copy.
This means that the DDI can be set up far quicker. It also means that you can immediately check whether the details supplied are accurate, as well as ensuring that the paper DDI is definitely completed – thus increasing your chances of a sale.
The advantages of paperless mandates
Whilst paper mandates have been used for years, Paperless Direct Debit is rapidly gaining popularity, both from customers and from businesses.
There are a few factors that make this method of collecting payments a better option for businesses:
- Speed. Businesses don’t have to wait for a DDI to be posted back to them. Your customer can immediately access your services and you can immediately start collecting money.
- Popularity. Customers increasingly prefer PDD because it’s a convenient option.
- Storage. The lack of a physical document means that there’s no need to store PDD. Businesses only need to keep an electronic database and sign-up log.
- Reduced admin processes. Allowing customers to sign up almost instantly means far fewer manual processes. Since you don’t have to transfer data from paper into an electronic database (since the data is often automatically transferred into one), you save on a lot of admin resource time.
- Cheaper to set up. Since they use a fully electronic process, PDD are lower cost to set up. Printing and postage costs are avoided.
- Additional revenue. The speed of PDD sign ups means that businesses are likely to get more customers signing up. This naturally leads to increased revenue and a larger profit.
- Environmentally friendly. The lack of physical, paper forms means that a lot of paper is saved annually.
For a Paperless Direct Debit solution that integrates straight into your business’ website, DFC has created FastDD Platinum. This solution creates a fully-integrated, 24 hour sales aid which automatically provides automatic bank account verification and reduces erroneous entries.
To find out more about how FastDD makes Direct Debit payment collections easy, read more about our ingenious solution.