Paperless Direct Debit (PDD)
Paperless Direct Debit, (PDD) 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.
Methods of paperless sign up
There are a number of different ways that a paperless Direct Debit Instruction can be obtained. These include:
- telephone sign up via a traditional phone call where a telephone operator takes the customer through the sign up process.
- telephone sign up via a telephone keypad entry system which mimics the role of the operator and guides the customer through the various required steps.
- internet sign up via the web using approved sign up screens
- interactive TV,
- face-to-face, (i.e using a PDA, handheld device or laptop)
Subject to bank approval, PDD can be up and running very quickly. As an approach it offers organisations clear advantages:
Advantages of Paperless Direct Debit
- quicker turnaround time to collections – no waiting for a postal DDI,
- 24/7 operation – i.e. with internet signup, an organisation can gain new payers outside of business hours,
- improves accuracy – fewer keying errors or poor handwriting to decipher, bank details checked in real time,
- reduces paperwork – and therefore administration time and costs, plus it is more environmentally friendly,
- less paperwork means less storage requirements,
- people prefer it (and are asking for it) – so by offering it you are improving your customer service and company image – giving yourself a competitive advantage,
- encourages more people to sign up, thereby creating additional revenue,
- establishes an immediate customer relationship, i.e with telephone signup there is an opportunity to answer any questions,
- simple to get up and running.
Additional Considerations with Paperless Direct Debit
There are strict rules that have to be adhered to when operating a PDD approach.
- The Paperless Direct Debit scripts used in telephone or face to face sign up must be approved in advance by the sponsoring bank.
- The organisation must also send confirmation of the arrangement to the payer and include a copy of the Direct Debit Guarantee.
- 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.
Also, service users need to be aware that the process relating to indemnity claims is affected. For example, Service Users cannot counter claim if they receive an indemnity for the reason ‘payer disputes having given authority’ because without the paper Direct Debit Instruction (and signature) they are unable to prove authority.
Moving to Paperless Direct Debit
In order to set-up a paperless sign-up system you must:
- be live on AUDDIS. If not you will need to have AUDDIS in place first,
- obtain approval from your sponsoring bank – so your Service User Number (SUN) can be paperless enabled,
- obtain approval of all internet screens, telephone scripts and other documentation, from your sponsoring bank,
- carry out a modulus check of the payers bank details at point of capture,
- have a KYC (Know Your Customer) process in place.
Implementing Paperless Direct Debit
To introduce Paperless Direct Debit you need to contact your sponsoring bank for the PDD application forms which you should complete and return for approval. You must also undertake a basic test of your understanding of the rules and processes. The bank will assess your application and then either approve or reject the application. In theory, this process should not take long and once the bank have given approval, you can begin to collect!