Paperless Direct Debit (PDD)
PDD as it is commonly known is a method of signing up new Direct Debit payers without them having to fill out a paper Direct Debit Instruction. Instead the Payer gives their authority remotely via one of the following channels:-
Telephone sign up via a traditional phone call
Telephone sign up via a telephone keypad entry system
Internet sign up via the web
Face 2 Face, where the organisation may use a PDA, handheld device, laptop or even key the information straight into a PC.
In each of these processes there are strict guidelines and scripts that have to be adhered to so that the information that is given and collected is correct. The Paperless Direct Debit script must be signed off by your sponsoring bank. This is to protect both parties and ensure that everyone understands exactly what the agreement is. The organisation must send confirmation of the arrangement to the payer and include a copy of the Direct Debit Guarantee
Paperless Direct Debit – easier than you think?
Direct Debit is commonly understood to be the easiest way for most organisations to collect ongoing revenue. Once the preserve or larger organisations, utilities etc. Direct Debit was brought to the masses via improvements in technology through the eighties & nineties.
As technology makes integration ever simpler so Paperless Direct Debit is now enjoying a similar boom. Even the smallest organisations now have the ability to implement PDD without major capital investment.
How has this happened?
Well many organisations now offer easy to use APIs or web service tools, which can either link to in house systems or direct to an outsourced bureau for collection, the 2nd option allows organisations with only a few hundred customers or members to achieve Paperless DD sign up. Subject to bank approval it can be up and running very quickly.
The opportunity to use web technologies rather than complex integration with CRM systems has seen an explosion of take up. Often the information can still be fed back into CRM via simple reports. There is also the option to implement paperless channels step by step rather than a big bang approach. That way it builds confidence before rolling out full internet and telephone sign up.
See more information on setting up Paperless Direct Debit
Advantages and Risks
There are a number of advantages associated with implementing PDD, including a reduction in paperwork, improved accuracy, a speedier turnaround and increased simplicity for customers. It is also greener of course. In a recent carbon emissions study commissioned by Bacs via Carbon Footprint Ltd, it was showed that the emissions associated with a paperless Direct Debit set-up were less than half those associated with the original paper based system. There are additional risks with PDD however that it is important to bear in mind, e.g., as the Service User is not obtaining a signed instruction they are required to check the identity of the payer using a KYC (Know your customer) process. Full details on KYC checking & Direct Debit Fraud can be found here.
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Paperless Direct Debit