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Choosing a Bacs DD solution

Direct debit is one of the most reliable and efficient methods for recurring payments. Offering a high degree of convenience, success and security, the Bacs Direct Debit (Bacs DD) scheme is popular among UK organizations and payers alike.

This article presents the essentials for deciding what kind of Bacs DD setup you should use with FinDock and Salesforce. We assume readers are already familiar with Bacs DD and what it means to be a Bacs Service User.

Your Bacs DD requirements

As with any tool decisions, it’s best to start with a clear formulation of your requirements. While not exhaustive, the following list includes topics that should be addressed:

  • Do you have existing tools and processes that must be supported?
  • Do you need to migrate payment data?
  • How do you want to sign up new payers?
  • How often do you need to collect direct debit payments?
  • How many transactions do you need to process on a regular basis?
  • How much control do you need to have over communications with payers?

These questions should be assessed in the context of your organization’s short and long-term goals to help you make your Bacs DD decisions.

Pay.UK has also put together a helpful checklist for organizations just getting started with payment systems.

Bacs DD options

There are direct and indirect options for accessing the Bacs payment system.

Using the Bacs payment extension, FinDock can generate Standard 18 files for DDI lodgement and payment collection. FinDock can also parse incoming Bacs reports (ADDACS, ARRUD, etc.) for reconciliation.

For indirect access through a third-party Bacs service provider, FinDock integrates with popular options like GoCardless, SmartDebit and Stripe.

You can use FinDock for anything from completely self-managed Bacs DD payments to fully integrated (standard or custom) Bacs services. When picking a Bacs DD option, ideally you can find a balance between ease and control, and fixed versus variable costs.

Ease vs. control

The Bacs DD scheme has plenty of rules (that benefit both debtor and creditors), so using an approved service provider is definitely easier and ensures Bacs compliance. However, you may not have control of parts of the process that are essential to your organization. That, or having control in this setup may mean additional costs for you.

Fixed vs. variable cost

Using FinDock in a fully self-managed setup means you can control just about every aspect of your operation. However, this requires investment in building and maintaining your customized Bacs DD solution, as well as resources to manage your Bacs DD activities. You can lower certain fixed operational costs by using a Bacs bureau, but you need to factor in contractual costs as well as possible variable costs such as per transaction fees.

Bacs DD with FinDock Bacs Manual

The FinDock Manual setup generates Standard 18 files for DDI lodgement and payment collection. It also automatically processes incoming Bacs reports that you upload to Salesforce. How files are transferred between your organization and the Bacs network is entirely up to you.

In practice this means you can operate directly with the Bacs network with your own custom solution, use Bacstel-IP software, or even transfer files to a Bacs bureau for processing. Adhering to Bacs timescales, handling the various required payer notifications and so forth are typically your own responsibilities in the Bacs Manual setup.

With Bacs Manual, you have complete control over customer experience. However, this also means you need potentially extensive customization to build communication and payment flows, in addition to internal resources for managing your Bacs DD operations.

Bacs DD with SmartDebit

The SmartDebit integration operates much in the same way as Bacs Manual. However, instead of Standard 18 files, the integration uses a SmartDebit-specific file format. Bacs files are transferred to and from SmartDebit automatically. Bacs transactions can be initiated by you or the payer, either manually or using online forms.

SmartDebit has a wide range of options to choose from in their service offerings. You can mix and match as needed to fit your needs within your operating expense limits.

Bacs DD with GoCardless and Stripe

The FinDock integrations with GoCardless and Stripe give you several ways to collect Bacs DD payments. Both can fulfill some or all of the Bacs DD scheme requirements depending on your contract contract with GoCardless or Stripe.

Currently, for example, new payers and payments can only be initiated through Stripe. This means you cannot manually add new contacts and installments in Salesforce. However, once the payer and payment instructions are created, you can run bulk payment collections through FinDock.

Generally speaking, the Stripe option leaves you with the fewest responsibilities in terms of Bacs DD requirements. They can handle everything for you.

With GoCardless, you have numerous potential configuration options, including the ability to create new payment data in FinDock or through GoCardless. The integration also includes unique GoCardless offerings such as Quick Direct Debit and GoCardless Payment Links. The availability of these and other GoCardless Bacs DD features depends on your contract.

Summary of key functional differences

The following table outlines which entity is responsible for different Bacs DD processes and requirements in the different Bacs DD options. With every option, FinDock ensures all payment data is updated and stored in Salesforce.

FunctionalityBacs ManualSmartDebitGoCardlessStripe
Lodge DDIsFinDockSmartDebitGoCardlessStripe
Mandatory KYC checksFinDockFinDockGoCardlessStripe
Bacs correspondenceCustomCustom / SmartDebitCustom / GoCardlessCustom / Stripe
Manage DDIsFinDockFinDockGoCardlessStripe
Bacs timescale adherence (see note below)CustomSmartDebitGoCardlessStripe
Bacs file creationFinDockSmartDebitGoCardlessStripe
Bacs network accessCustomSmartDebitGoCardlessStripe
Bacs report processingFinDockFinDockGoCardlessStripe

Bacs timescales are handled by the payment processor entity (your organization, if FinDock is the processor). However, service bureaus may have their own lead time requirements that you must also follow.