Service User Numbers: Getting Access to Direct Debit

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While researching the ins and outs of Direct Debit, you may feel like you’re entering uncharted terminology territory. Strange names, mysterious acronyms, peculiar phrases.

They’re simpler than they might sound. Learning about them will empower you with knowledge and help to ease the decision-making process.

Once you’ve got to grips with bureaux, BACS and everything in between, you’ll have a clear understanding of the inner workings of this secure, reliable and automated method of accepting payments.

Here we’ll demystify and simplify one particular acronym: SUN. Read on to discover how a service user number will play an essential role in your financial streamlining plans.

What Is A Service User Number?

bacs service user numberA service user number is a unique six-digit code given to each organisation which collects money via Direct Debit. You can’t introduce Direct Debit to your business without one.

Usually shortened to SUN and sometimes called an originator ID, it acts to identify each company, charity or organisation signed up to the scheme.

Bacs, who process all Direct Debits and manage the SUN database, use this number in all their communications including each corresponding transaction record.

Banks also use a Bacs service user number to look up the name to display on the payer’s bank statement, ensuring transparency, and to check details of the originator. If a payment is reclaimed by the customer, the SUN is also used to identify the correct originator who is now liable for the refund.

Why Do I Need A Service User Number?

You can’t accept Direct Debits without one.

If your payments research is leading you towards Direct Debit, the Bacs system means it’s a necessity.

Established in 1968, Bacs allows the electronic transfer of funds between UK banks. It processes billions of transactions each year in the form of Direct Debits and Bacs Direct Credits. These payments are fully automated to simplify moving money from one account to another on a regular basis.

From collecting membership fees and monthly payment instalments to paying pensions and benefits, they offer businesses and organisations an efficient, streamlined option to manage their accounting.

SUNs are integral to how the Bacs system works but just how do you get your hands on one?

How Do I Get a Bacs Service User Number?

do i need a service user numberThere are two main ways to access Direct Debit and therefore get a SUN: managing the process in-house and working directly with your bank, or signing up with a Direct Debit bureau who can do the job for you.

Those who use the first of these options are called direct submitters to Bacs, using direct access. Choose the second approach and you’ll be an indirect submitter.

Direct Access

Direct access is only feasible if you’re a large organisation with a high turnover.

For some banks, this needs to be at least £1m. This figure will immediately exclude numerous businesses, who may previously have thought Direct Debit was accessible to them, from taking this path.

But if you do fall into the direct access category, there are several hurdles to clear before you can start processing Direct Debits.

Bacs will only issue a service user number to organisations sponsored by its members, i.e. the UK’s major banks. Each bank has a separate application process but all require the following criteria to be met:

  • The proven management expertise to administer the scheme according to its rules, minimising errors and maintaining its reputation, avoiding bringing it into disrepute.
  • The financial reserves to refund any indemnity claims under the Direct Debit Guarantee.
  • The contractual capacity to indemnify the sponsor bank against any refunds made under the Guarantee.

If your business can tick all these boxes, and potentially more, and you’re prepared to wait several months for a decision, this could be the route for you.

Once accepted and presented with your own unique SUN, you will then need to pay several thousand pounds in set-up fees.

The day-to-day demands of administering an internal Direct Debit set-up requires the technical expertise to collect, store and submit correct payment information to Bacs. This needs to be done to exacting standards to avoid complaints which could put ownership of your SUN at risk.

It also requires a commitment to invest in ongoing staff training, specialist software updates and resources that all take time, money and effort.

Indirect Submitter

bacs numberIf your enterprise isn’t big enough to become a direct submitter, all is not lost. Direct Debit is now accessible to all thanks to specialist bureaux who act as a third party.

They enable SMEs, charities and organisations to conveniently collect regular payments by Direct Debit by enabling them to submit indirectly to Bacs.

A professional bureau, such as FastPay, will allocate you a service user number while maintaining ownership of it. As the owner, they receive your clients’ payments into their own account first before transferring it to yours in exchange for a service fee.

They will do the hard work for you, managing and submitting payments to Bacs while you concentrate on running and growing your business. No more hours spent chasing late payments, no keeping your fingers crossed that cheques won’t bounce, just peace of mind thanks to a hassle-free system.

This arrangement eliminates the onus of having to meet the banks’ strict criteria: instead, it’s the bureau that has to satisfy Bacs’ requirements, including a thorough inspection. They then become members of the Bacs approved bureaux scheme which is closely monitored.

Deciding to become an indirect submitter and outsourcing to a bureau is an affordable option. You’ll still pay a set-up fee and be charged per collection, but the costs are easily recouped through a significant reduction in admin hours.

There’s also a third option. If you’re able to get a bank-sponsored SUN but the thought of managing a complex scheme in-house doesn’t appeal, you can outsource it to a bureau. In this case, you’d sign up to a Bureau Service.

With lower processing fees than a facilities management, or managed service, this is a useful choice for bigger corporate businesses who want to free themselves from unnecessary admin.

Each service makes it easy to collect Direct Debit payments from customers: a time-effective, cost-effective and simple solution for your business.

You’ve got your SUN. What next?

Once you’re signed up to your bureau, your SUN allows you to immediately start collecting payments. With FastPay, you can be up and running with their Managed Service in just 24 hours.

Armed with your Bacs service user number, you can now tell your customers that they’re able to pay you via Direct Debit. They’ll soon be enjoying peace of mind, convenience, flexibility and control over their budget: a more efficient service for them and you.

Each customer will need to complete, sign and return a Direct Debit Instruction authorising you to collect payments from them, provided you give advance notice. A DDI can be completed either online, over the phone or on paper.

Direct Debit providers can supply fully-branded Bacs-approved web forms, phone scripts and paper mandates to gather all the information you need such as account numbers and sort codes, payment amounts and collection dates.

They will also manage the submission of this data to Bacs on your behalf. Your customers’ accounts will then be debited and payments transferred into your business account once they’ve cleared.

And there’s no need to worry about losing that personal touch when collecting payments.

FastPay uses unique SUNs for each Managed Service client, meaning that your business name and logo, rather than the impersonal name of your bureau, will appear on all documents including bank statements.

Keeping Your SUN Safe

keeping your sun safeBacs has the power to withdraw SUNs from those who don’t uphold their high standards. If you’re a direct submitter managing your own scheme, this directly places the responsibility on you to follow the rules.

If Bacs receive a high number of complaints via the Direct Debit Guarantee, you may lose your SUN, jeopardising your ability to collect money via Direct Debit.

For indirect submitters, the onus falls on the bureaux. It’s therefore in their best interests to operate a secure, reliable scheme for your business that is administered efficiently and professionally.

Now you know the answer to the question ‘What is a service user number?’, you can move forward with your plans to embrace the transformative power of Direct Debit.

You’ll be joining thousands of UK businesses and organisations that rely on its extensive benefits to organise their finances and reduce their admin load.

For your business, it improves cashflow, saves admin time and money, streamlines your banking, improves security and creates numerous accounting efficiencies.

For your customers, it gives them peace of mind, convenience, flexibility and control. They know that their payments are being made on the right date and that they won’t be faced with late payment charges. Loyal to your brand thanks to this great service, they’ll be more likely to stick with you.

Thanks to six simple numbers – your own personal SUN – you’ll be enjoying a fresh financial future.

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