The Benefits of Paperless Direct Debit
The paperless route was introduced in 1998 to increase the speed of the signup process. There are a number of possible approaches with paperless signup and each offer different advantages:
- Telephone: The payer provides their authority over the phone by giving account details verbally to the service user representative. If any account details are incorrect they can be checked and verified by the service user representative with the payer on the phone. By doing this at the point of sign up, the service user representative can negate the need for further correspondence or failed set up. In addition, the immediate customer support offered by the service user representative in this way, is already strengthening the relationship.
- Internet: The payer provides his/her authority by completing an on-screen DDI which is sent to the service user over the internet. This offers the advantage that payers can sign up at any time of the day or night, which depending on the business and payer demographics, can be advantageous, i.e. students and shift workers will often sign up to services in the evening whilst others, i.e. retired payers may prefer to sign up during the day. A checking system can also be built in to the screens to ensure that the payer is unable to progress if details are entered incorrectly
- Face to face: The payer must be offered a paper DDI to sign however if the customer is willing, a service user representative can enter the details straight into a computer without signing a paper copy. This offers the benefits that the DDI can be set up far quicker than if a paper DDI has to be forwarded and received and the details then entered into the system. It also allows for immediate checks of the accuracy of information provided, as well as ensuring that the paper DDI is not taken away to be completed ‘at some point in the future’ by the customer, (a time where possible customers are often lost due to failure to complete the form).
- Telephone key pad / interactive tv: A less common approach, but ones which as above, can be used to ensure that immediate checks are conducted on the data and that customers sign up there and then rather than going away and possibly being lost to follow up.
In addition to the advantages mentioned above, Paperless Direct Debit offers:
- Quicker turnaround time – no waiting for a postal DDI. This means the Service User can collect monies faster and provide the payer with prompt access to goods/services
- Reduces paperwork and postage costs – and it’s environmentally friendly
- Better service – you can gain business and competitive advantage as customers like internet / telephone options.
- Improved accuracy – fewer keying errors or poor handwriting to decipher – bank details checked in real time.
- Get more people signed up – additional revenue
Paperless Direct Debit addresses some of the issues caused by paper sign-up:
- Poor handwriting on paper DDI’s - Often detail can be keyed into a system incorrectly due to poor handwriting or missing information on a paper DDI. With a system where details are keyed directly into an interface and validated at point of entry/sale, this issue is negated.
- Moving customers away from other payment types - Sending out a paper DDI to move existing customers away from Standing orders or other payment approaches, provides an opportunity for the customer to ‘opt-out’ of the service. By gaining authorisation during customer contact, i..e with a service user representative on the phone or face to face, the fears / concerns of the customer can be addressed and overcome which is more likely to result in a successful outcome.
Paperless Direct Debit Signup – Issues to Consider
In order to operate a paperless signup system a service user MUST:
- Obtain approval from their sponsoring bank to run a paperless system. It will not be suitable for all organisations
- Have live AUDDIS status (as authority has to be transmitted electronically)
- Only use their AUDDIS SUN’s for paperless DD applications. The service user should not submit a paper DDI under an AUDDIS SUN
- Obtain approval of all documentation from the sponsoring bank before collecting DD instructions, particularly:
- The script used for telesales staff, face to face, telephone keypad and internet screens
- DD confirmation letter
- Advance Notice
A paperless approach does introduce additional liability / risk and therefore does require additional processes to be in place. It is therefore not suitable for all products or sectors. Service users should be aware of the additional risks:
- It is the service users responsibility to verify the customer details. There are a number of ways that this can be done, including existing customer records, electoral roll details etc.
- It is the service users responsibility to validate the payers bank details, i.e. by conducting ‘modulus checking’.
- Service users cannot counter claim following receipt of an indemnity claim because ‘payer disputes have given authority’.
- Service users must issue a ‘Confirmation’ that the direct debit set-up, Further information on confirmation is contained on the next page