Paperless Direct Debit
The preferred membership
payment option

© Bacs Payment Schemes Limited 2013
2 Thomas More Square, ...
What’s covered….
•
•
•
•
•
•
•

Who are Bacs?
Direct Debit – how it works (Standard / AUDDIS / Paperless)
Direct or indire...
Who are Bacs?
•

A not for profit, membership based industry
body owned by 16 of the leading banks and
building societies ...
45 years at the heart of the
payments industry
•
•
•
•
•
•
•

5.7 billion payments
£4.3 trillion value
3.3 billion Direct ...
How does it work?
Day 1 - Input day
• Input day is the latest day a business user/bureau may submit a payment
file to Bacs...
Get going with Direct Debit
•

•
•

Contact your bank - provided you meet the required criteria, which involve
checks for ...
Direct or indirect access?
Direct
• Bacstel-iP
• Bacs solution supplier software
• Payment Services website
Indirect
• Bac...
Direct Debit – why?
•
•

•
•
•

•

It's cheaper than cheque and safer than
cash
You control the date of receipt into your
...
Paper, AUDDIS or paperless?
•

Paper based
– Customer completes a paper Direct Debit instruction and returns it to the bil...
Paperless DD – why?
•

•

•

•

•

Eliminates much of the paperwork,
delay and postage costs associated
with setting up Di...
Consumers like Direct Debits
79% of the GB adult population have a positive attitude to Direct Debit
PREFERRERS

SELECTIVE...
Saturated or still an opportunity?
0%

10%

20%

30%

40%

50%

ELECTRICITY BILLS

11% 3%
3%
11% 3%
4%

70%

80%

90% 100%...
Saturated or still an opportunity?
0%

10%

MEMBERSHIP OF MOTORING ORGANSIATION

20%

30%

17%

40%

25%

50%
15%

SUBSCRI...
Benefits to customers
•

Paper, AUDDIS or paperless – all have the
same core benefits to consumers
–
–
–
–
–

•

•

Conven...
Don’t just take my word for it
•
•

•

•

The leading national charity for
spinal cord injured people
User led organisatio...
Spinal Injuries Association
•
•
•
•

Business drivers – cost reduction and lowering DD rejections
Main issue was the updat...
Bacs marketing support - bacs.co.uk/marketingdirectdebit
•

•
•

•
•

Local authority sector – 4th year in London – 1m new...
Our Big Break campaign credentials
•

Big Break 2012
–
–
–
–
–
–

29 billers mailed 4.2m consumers
2.06m new transactions ...
Big Break 2014
•

•

•
•

•

£12,000 cash prize - this represents a
year’s worth of household bills – plus
£2,000 for busi...
Graham Callaghan
graham.callaghan@bacs.co.uk
07825 543777
Dawneth Perry
d.perry@bacsservices.c.uk
07980 797356
w: www.bacs...
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Paperless direct debit - the preferred membership payment option

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Originally delivered at the 'Harnessing the web 2013' conference in October, this presentation gives an insight into the benefits of Direct Debit and outlines how Bacs' specialist team can help your business get the most out of Direct Debit.

Published in: Business, Economy & Finance
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  • Over 5.7 billion payments a yearEquates to over £4.3 trillion in 2011Over 3.3 billion Direct Debit payments a year 75 per cent of adults have at least one Direct DebitOver 90% of the GB workforce is paid via Bacs Direct Credit. 5 million wages a week and 23 million salaries a month paid by Bacs92.9 million transactions processed in a single day.
  • Paperless direct debit - the preferred membership payment option

    1. 1. Paperless Direct Debit The preferred membership payment option © Bacs Payment Schemes Limited 2013 2 Thomas More Square, London E1W 1YN Telephone 020 3217 8370
    2. 2. What’s covered…. • • • • • • • Who are Bacs? Direct Debit – how it works (Standard / AUDDIS / Paperless) Direct or indirect access – a model for all organisations Consumer perceptions of Direct Debit The benefits for organisations and consumers One charity’s experience Marketing support from Bacs
    3. 3. Who are Bacs? • A not for profit, membership based industry body owned by 16 of the leading banks and building societies in the UK, Europe and US • Responsible for the day to day running and integrity of the Direct Debit and Bacs Direct Credit schemes in the UK • Identify and support opportunities that generate additional Direct Debit and Bacs Direct Credit volume
    4. 4. 45 years at the heart of the payments industry • • • • • • • 5.7 billion payments £4.3 trillion value 3.3 billion Direct Debit payments 75 % GB adults 90% GB workforce 5 million weekly wages 92.9 million daily transactions
    5. 5. How does it work? Day 1 - Input day • Input day is the latest day a business user/bureau may submit a payment file to Bacs for a processing cycle. Payment files must be transmitted to Bacs between 07.00 and 22.30 Day 2 - Processing day • Files are delivered to the recipient banks which then process each payment Day 3 - Entry day • Payments are simultaneously credited to the recipients’ accounts and debited from your account.
    6. 6. Get going with Direct Debit • • • Contact your bank - provided you meet the required criteria, which involve checks for integrity, financial standing and administrative capability, you will be accepted onto the Scheme Choose an access method – direct or indirect (via a bureau) Paper, AUDDIS or paperless DD?
    7. 7. Direct or indirect access? Direct • Bacstel-iP • Bacs solution supplier software • Payment Services website Indirect • Bacs approved bureau • Payment Services website Facilities management • No sponsorship required • FM co collects in their name, re you • Collect funds into a ‘client account’ • Manages reports and exceptions
    8. 8. Direct Debit – why? • • • • • • It's cheaper than cheque and safer than cash You control the date of receipt into your account You get cleared funds in your account on a known date You can collect variable amounts on regular or irregular dates It can eliminate time consuming reconciliation. Only errors and nonpayments will be notified to you, so you can carry out reconciliation by exception Customers like them
    9. 9. Paper, AUDDIS or paperless? • Paper based – Customer completes a paper Direct Debit instruction and returns it to the biller – Biller logs details and posts it to the customer’s bank – Biller can claim on the DDI after 10 working days • AUDDIS – Customer completes a paper Direct Debit instruction and returns it to the biller – Biller lodges the DDI with customer’s bank electronically via Bacs, keeping the paper DDI (or not) – Biller can claim on the DDI after 2 working days • Paperless – Customer signs up over the phone, internet or face to face – no paper instruction – Biller lodges the DDI with customer’s bank electronically via Bacs – Biller can claim on the DDI after 2 working days
    10. 10. Paperless DD – why? • • • • • Eliminates much of the paperwork, delay and postage costs associated with setting up Direct Debits Increased simplicity and convenience for the payer, with no forms and no delays Modulus checking at ‘point of sale’ ensures accuracy of account details, eliminating later costly admin problems You can begin the collections process earlier, as you don’t need to wait for the payer to complete and return the Direct Debit Instruction Phone and web can help increase sales conversions
    11. 11. Consumers like Direct Debits 79% of the GB adult population have a positive attitude to Direct Debit PREFERRERS SELECTIVES RELUCTANTS CANNOT / WILL NOT 63% actively prefer to pay by Direct Debit (37% advocate) 16% are selective but positive about paying by Direct Debit 7% are reluctant to pay by Direct Debit 8% will not and 2% cannot pay by Direct Debit
    12. 12. Saturated or still an opportunity? 0% 10% 20% 30% 40% 50% ELECTRICITY BILLS 11% 3% 3% 11% 3% 4% 70% 80% 90% 100% 53% GAS BILLS 60% 50% TELEPHONE BILL WATER BILLS 6% 2% 1% 67% 6% 7% 4% 59% SUBSCRIPTION TO DIGITAL/CABLE OR SATELLITE TV 4% 3% 1% Cash Cheque 70% Debit Card INTERNET 3% 4% 1% SEPERATE CABLE PHONE BILL COUNCIL TAX 19% 71% 9% 4% 49% 8% 4% 3% MORTGAGE 1% 0% LIFE OR ENDOWMENT ASSURANCE 0% 1% 0% Direct Debit 69% 85% 75%
    13. 13. Saturated or still an opportunity? 0% 10% MEMBERSHIP OF MOTORING ORGANSIATION 20% 30% 17% 40% 25% 50% 15% SUBSCRIPTION FOR MOBILE PHONE 4% 18% 7% 20% 5% 70% 80% 90% 100% 17% 43% TRADE UNION SUBSCRIPTION 2% 60% 47% REGULAR PAYMENTS TO CHARITY 6% 4% 2% 78% CLUB/SOCIETY SUBSCRIPTION 0% 3% 1% Cash Debit Card 51% Internet Banking MAGAZINE SUBSCRIPTION 0% 1% 2% HEALTH CLUB GYM MEMBERSHIP 0% 2% 3% OPTICIANS 2% 0% OTHER INDIVIDUAL COMMITMENTS 11% 3% 2% PAYMENTS FOR CATALOGUE/MAIL ORDER 9% 5% 2% 75% 36% 49% 58% 55% Direct Debit
    14. 14. Benefits to customers • Paper, AUDDIS or paperless – all have the same core benefits to consumers – – – – – • • Convenience Budgeting Not forgetting bills Control Protection of the Direct Debit guarantee PDD offers the added benefits of increased simplicity and convenience for the payer, with no forms and no delays. Immediate cover / membership without initial instalment on a credit or debit card
    15. 15. Don’t just take my word for it • • • • The leading national charity for spinal cord injured people User led organisation – people with spinal cord injuries supporting others in the same situation 5 years a Direct Debit service user, only 1% of income from only 100 regular donors Decided to move to paperless DD in 2012 – a 6-8 month project
    16. 16. Spinal Injuries Association • • • • Business drivers – cost reduction and lowering DD rejections Main issue was the updates required to their database Cost quoted at ‘around £5,000 all in’ Benefits accrued – – – – – Immediate set up – no waiting for paper flows Reduced staff time on modulus checking – automated now Reduced number of rejected lodgements Faster reporting Set up to grow regular donors in the future
    17. 17. Bacs marketing support - bacs.co.uk/marketingdirectdebit • • • • • Local authority sector – 4th year in London – 1m new transactions up to 2012, up to 9.5% response rates, plus developing interest for other regional campaigns and member banks Housing rent sector – to support social landlords deal with the roll out of Universal Credit Water sector – 2nd year in 2013 – 2012 generated almost 500,000 new transactions from three participants, up to 4.3% response rate and uplift in response rates from 24% - 400%. Five participants to date for 2013 Magazine subscriptions campaign – launches Oct 2013 – 5 publishers, 74 titles promoting Direct Debit until March 2014 Individual biller support on case by case basis
    18. 18. Our Big Break campaign credentials • Big Break 2012 – – – – – – 29 billers mailed 4.2m consumers 2.06m new transactions pa £135,000 for 15 charities 160m campaign reach Up to 28% campaign response A major utility – 20% uplift in response Q2 v Q1 • Big Break 2013 – – – – – – 91 billers contacted 9.2m customers 3.23m new transactions pa £140,000 raised for 120+ charities 95m campaign reach Water company – 19% response Major utility – 2.1% response from 4m customers
    19. 19. Big Break 2014 • • • • • £12,000 cash prize - this represents a year’s worth of household bills – plus £2,000 for business to business Participating billers’ new / existing Direct Debit payers are put into the prize draw Single campaign across the UK and Northern Ireland Overarching CSR umbrella – looking to raise money for 100 good causes as part of the campaign – target to raise £150,000 in total Campaign to run from 1 February 2014 to 30 June 2014
    20. 20. Graham Callaghan graham.callaghan@bacs.co.uk 07825 543777 Dawneth Perry d.perry@bacsservices.c.uk 07980 797356 w: www.bacs.co.uk
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