How can I provide a direct debit payment option?

[TracyK]

My client has been trading for a good number of years now - but is soon going to need to offer HIS clients the option to pay monthly subscriptions by DD.

I thought it would be as straightforward as getting the bank to set up the DDs based on the customers details.

My client has now been approached by Eazipay blah blah saying they can do all the DD processing for him. Does he need them?

Yes he does need a 3rd party payment processor - setting up as an 'Originator' in his own right would not be economic even if his bank were willing to sponsor him.

There are many organisations that offer this service, some are more upfront about their charges than others but I cannot recommend any.

Thanks MrA. I'll get him to think it through carefully before he goes jumping straight in.
Is there another option for receiving monthly payments while he only has 2 or 3 customers?

Standing orders are fee free, but they are set up by the customer and he would have no control over the amount or the frequency.

That's what I was thinking mrspnut.
Will have a look at fab and see if they have any deals on the go.

Hello

I have worked/now consult for the membership sector, a number who offer DD as it generally means less paperwork (the one letter advising of the DD being taken versus 4 or 5 renewal reminders) and people often don't bother to cancel their DD...

One client was refused DD by their bank, as they required 3 years of accounts (which they didn't yet have) and the bank didn't seem to be able to cope with the fact they were non-profit. The man at HSBC told me (almost proudly!) that they turn 99% of DD applications down. He cited the "unlimited liability" that they pose.

However, if you are a normal profit making business then they may take a different approach. Gyms etc all seem to offer them.

If your client is interesting in doing it themselves and wants training, you could try these - www.clearacademy.co.uk/

The solution for the client above was to outsource the lot to www.firstcapitalcashflow.co.uk/ not sure how it is going though, as my bit stopped with finding them a solution. They are probably similar to the people your client has already spoken to. There was a min charge which isn't great.

If I was starting a DD service from scratch I'd aim for paperless and annual or quarterly (avoiding monthly).

Not sure if any of this is relevant or helps!

Good luck.
WS

Thanks Watersign.
My client does have 3 years worth of accounts - and is on fairly close/good terms with his bank.
Unf. his last 2 years accounts have been dire - so the bank may not want to let him do them himself.
He has just joined the FSB - so will see if they have deals on the go.