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.

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. What’s covered….
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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. Who are Bacs?
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A not for profit, membership based industry
body owned by 16 of the leading banks and
building societies in the UK, Europe and US
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Responsible for the day to day running and
integrity of the Direct Debit and Bacs Direct
Credit schemes in the UK
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Identify and support opportunities that
generate additional Direct Debit and Bacs
Direct Credit volume

4. 45 years at the heart of the
payments industry
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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. 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. Get going with Direct Debit
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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. 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. Direct Debit – why?
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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. Paper, AUDDIS or paperless?
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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
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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
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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. Paperless DD – why?
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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. 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. 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. 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. Benefits to customers
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Paper, AUDDIS or paperless – all have the
same core benefits to consumers
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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. Don’t just take my word for it
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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. Spinal Injuries Association
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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
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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. Bacs marketing support - bacs.co.uk/marketingdirectdebit
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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. Our Big Break campaign credentials
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Big Break 2012
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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
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Big Break 2013
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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. Big Break 2014
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£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. Graham Callaghan
graham.callaghan@bacs.co.uk
07825 543777
Dawneth Perry
d.perry@bacsservices.c.uk
07980 797356
w: www.bacs.co.uk