A Step-by-Step Guide to Setting Up Direct Debit for Your Customers

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A Step-by-Step Guide to Setting Up Direct Debit for Your Customers



Offering a direct debit payment option to your customers can streamline your payment processes and ensure timely and consistent payments. By setting up direct debit, you gain the convenience of automated collections, reduced administrative burden, and improved cash flow management. This article will guide you through the process of setting up a direct debit system for your customers.


Step 1: Research Direct Debit Providers:

Start by researching reputable direct debit providers that suit your business needs. Look for providers that offer secure and reliable services, have a good track record, and provide robust customer support. Compare pricing structures, features, and contract terms to make an informed decision.


Step 2: Choose a Bacs-Approved Bureau:

Select a Bacs-approved bureau company to handle your direct debit collections. Bacs (Bankers’ Automated Clearing Services) is the organisation responsible for the UK’s Direct Debit and Bacs Payment Schemes. Choosing a Bacs-approved bureau ensures compliance with industry standards and provides peace of mind regarding security and reliability.


Step 3: Set Up an Account:

Once you’ve chosen a direct debit provider, follow their registration process to set up an account. Provide the necessary business and banking information, including your company details, bank account details, and contact information. Ensure that all details are accurate and up to date.


Step 4: Obtain Customer Authorisation:

To set up a direct debit for a customer, you must obtain their explicit authorisation. This is typically done through a Direct Debit Instruction (DDI) form or an online mandate. Provide clear instructions on how customers can complete and submit the DDI form. Make sure to include important information, such as the payment frequency, the collection amount, and the payment date.


Step 5: Inform Customers:

Communicate the availability of direct debit payment options to your customers. Clearly explain the benefits of direct debit, such as convenience, automation, and better cash flow management. Encourage customers to sign up by highlighting the ease and simplicity of the process.


Step 6: Submit Customer Details:

Collect the completed DDI forms from your customers and submit their details to your chosen direct debit provider. Ensure that all information is accurate and complete, including the customer’s name, bank account details, and authorisation signature. Promptly send the forms to the provider to initiate the setup process.


Step 7: Test and Confirm:

Work closely with your direct debit provider to test the setup and ensure that everything is functioning correctly. Verify that the payment amounts, frequencies, and collection dates are accurate. Conduct test transactions to confirm that funds are being transferred seamlessly from your customers’ accounts to your business account.


Step 8: Monitor and Manage:

Once the direct debit system is up and running, closely monitor your collections and reconcile them with your financial records. Regularly review the payment reports provided by your direct debit provider to stay on top of payment statuses and identify any issues or discrepancies. Promptly address any failed or rejected payments and maintain open communication with your customers.



Setting up a direct debit system for your customers can significantly improve your payment processes and cash flow management. By following the step-by-step guide outlined above, you can establish an efficient and reliable direct debit system. Remember to choose a reputable provider, obtain customer authorisation, submit accurate details, and monitor collections closely. Embrace the convenience of direct debit, enhance customer satisfaction, and streamline your business operations.


Need Help with Your Payments?

At FastPay, we help a multitude of businesses and organisations take care of their payments. From our Direct Debit Managed service and Powerful Integrations to the FastPay Direct Debit Bureau, we’re committed to providing a payment solution tailored to our client’s needs.

Start a conversation with our friendly team today by calling 0161 737 5290 or get in touch online.


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