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New Direct Debit rules make it easier for practices to switch provider
New Direct Debit rules make it easier for practices to switch provider
Paul Ebert avatar
Written by Paul Ebert
Updated over a week ago

We’re delighted to share news that Direct Debit providers can no longer stop customers from switching to another provider, thanks to changes in the Direct Debit scheme rules, announced by BACS on 10 November, 2017 and supported by the UK Payments Systems Regulator (PSR).

We believe that every business should be able to move between payment providers freely, so we’re delighted that BACS is making these rule changes.

What is changing?

Under the old rules, companies who processed Direct Debit on behalf of merchants (sometimes known as Facilities Management or ‘FM providers’), could request that an outgoing Direct Debit provider transfer across all of a customer’s existing Direct Debit mandates to them, known as the bulk change process. However, the outgoing FM provider was under no obligation to meet that request.

The new rules, which took effect from January 2018, require all FM Direct Debit providers using the BACS Direct Debit scheme to be certified by BACS. As part of that certification, FM providers must commit to use the bulk change process.

End to an unfair practice

Until now, this loophole in the BACS Direct Debit scheme rules has allowed some providers to hold hostage unhappy customers and effectively prevent them from switching to a new provider. As a result, some businesses have been stuck using a service that may not suit their needs.

Our commitment

We realise that switching can take place in any direction and we commit in our Merchant Agreement to helping our customers change providers if they want to do so, including through the use of the bulk change process. We’re confident enough in our service to know that this doesn’t happen often.

You can read more about the bulk change process in our Guide to transferring Direct Debit mandates.

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