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.
Bacs DD options
You can directly access the Bacs network for processing Direct Debit Instructions (DDIs) and payment collections via Hardware Security Module (HSM) protocols, approved Bacstel-IP software or proprietary software that has been approved by the Bacs Approved Software Service (BASS).
Alternatively, you can work with the Bacs network indirectly via a Bacs Approved Bureau Service (BABS) third party, either a bureau or full Facilities Management provider. A single third party can offer both services.
Out of the box, FinDock supports all these options. FinDock can generate Standard 18 files for DDI lodgement and payment collection however you want to handle those processes. FinDock can also parse all standard Bacs reports (ADDACS, ARRUD, etc.) for reconciliation. In addition, FinDock has direct integrations with selected Bacs service providers, including 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
While using FinDock in a fully self-managed setup means you can control just about every aspect of your operation, it requires investment to build and maintain 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 lodgment 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. However, at least currently, Stripe is an accredited Bacs Facilities Management provider. GoCardless, on the other hand, is both an approved Bacs bureau and an accredited Bacs Facilities Management provider.
This distinction means you have more setup options with GoCardless. For example, with Stripe all Bacs communications are necessarily handled by Stripe. With GoCardless, you can handle the communications yourself (if allowed in the contract).
Perhaps most importantly, new payers and payments can only be initiated through Stripe, so new payers and payments cannot be added manually in Salesforce. However, once the payer and payment instructions are created, you can run bulk payment collections through FinDock. The Stripe option gives you the fewest responsibilities in terms of Bacs DD requirements. They 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.
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.
|Mandatory KYC checks||FinDock||FinDock||GoCardless||Stripe|
|Bacs correspondence||Custom||Custom / SmartDebit||Custom / GoCardless||Stripe|
|Bacs timescale adherence (see note below)||Custom||SmartDebit||GoCardless||Stripe|
|Bacs file creation||FinDock||SmartDebit||GoCardless||Stripe|
|Bacs network access||Custom||SmartDebit||GoCardless||Stripe|
|Bacs report processing||FinDock||FinDock||GoCardless||Stripe|
Bacs timescales are handled by the payment processor entity (your own organization, if FinDock is the processor). However, service bureaus may have their own lead time requirements that you must also follow.