by Jim Conning, Payments and Collections Director, Bottomline Technologies
Direct Debits (DD) and Direct Credits (DC) have undoubtedly become a cornerstone of the UK’s payment processes over the past decade, with almost six billion payments processed each year. Yet most organisations’ DD and DC mandate set up processes are clearly still inadequate: almost a quarter of individuals (23%) have experienced a problem setting up or amending a DD or DC in the past 12 months.
Bacs estimates every DD failure costs up to £50 to repair; while the potential bank charge for failed transactions across the Single European Payments Area (SEPA) from February 2014 is uncapped. Furthermore, neither cost takes into account the loss of the failed transaction value or the impact on the customer relationship: 14% of consumers actually admit to having cancelled a policy or subscription due to complicated DD or DC set up processes.
So how can a business simplify the creation of these vital DD and DC payments whilst also imposing far greater control to minimise human error and avoid fraud? Jim Conning, Payments and Collections Director, Bottomline Technologies outlines the importance of sort code and bank account validation and verification at source to drive down costs and maximise the value of a flexible payment model.