Legacy direct debit is fraught with dishonour fees and fraudulent activity. Our new process uses our unique payments system and helps remove the negative components of direct debit, ensuring that businesses and customers can benefit from a more accurate and efficient direct debit system.
Direct Debit is a brilliant way to collect consumer fees in an ongoing way, however it is very important to use robust direct debit infrastructure and ensure that you have proper agreements in place with your customers. There are a few components that must be considered prior to setting up direct debit for your customers.
1. A correct legal document agreement must be drafted to present to your customers, clearly outlining the repayment or payment schedule required to receive your product/service. This should state the service or product the customer is receiving, the total amount of money owed for the service, the breakdown of repayments to receive or payback for the service or product, any fees involved and what happens if a repayment is late or not paid. The customer should sign and date this agreement and the agreement securely stored.
2. How you manage dishonoured payments. What process will you take if a payment is dishonoured from a customer? Keep in mind, that a dishonoured payment can affect your direct debit ‘rating’ with the banks. Instant Pay will help reduce your dishonour rate by sending payment reminders that day before a direct debit is due. Dishonoured payments are shown and stored in your Instant Pay console and will require your attention to attempt to process again.
3. How you manage a fraudulent transaction notifications. If in the extreme case a customer disputes the direct debits that have been taken from their account, you will need to show proof of the service agreement you obtained prior to the debits. Instant Pay will keep a copy of the DDRSA (Direct Debit Service Agreement) which outlines how we process the debits, the recurring nature and the date/timestamp the customer agreed to these terms. As part of our enhanced direct debit service, we also store the legal bank name, BSB and ACC provided by the customer at the time of the DDRSA being agreed to.
Our banking partner will review both your customer agreement and also our DDRSA before making the final decision on whether the direct debit has been correctly and lawfully processed. If the bank decides that the customer as been incorrectly debited, you will be required to return any debited funds within the time stated by the bank.
4. Managing customer profiles through Instant Pay. When using our enhanced direct debit process, we will provide the customer’s profile name, the customers bank name and their BSB and ACC details. It is your responsibility to ensure that these details match. Dependent on your business risk profile (High if in Bullion, Crypto or Remittance), these details must match to meet these regulations. We recommend you immediately terminate the direct debit agreement if these details do not match, or ask the customer to submit banking details that do match their customer profile submitted. In an ongoing effort to help our merchants meet their AML/CTF requirements, customer profiles that do not match their submitted bank name will be highlighted or alerted in the Instant Pay console.
Prior to using Instant Pay’s enhanced direct debit feature, we will require an example legal agreement you propose to use for your customer(s) and to also complete our standard onboarding/KYC process.To enquire about using Instant Pay’s enhanced direct debit, simply registered for free through our website by clicking here.