All the time I get asked what are the differences between doing direct debits yourself and working with an outsourced provider.  Ok, I work for an outsourced direct debit provider so my answer here is going to be biased towards outsourcing.  I would be happy if someone from a bank wants to tell me why they think doing direct debits yourself is better than outsourcing….

Anyway here are the key points that I always recommend businesses consider.

1. Online customer sign-ups – our business (Ezypay) has this technology that enables either customers or businesses to create a direct debit request form online with no paper work involved.  This is not something that you will get from a bank.  You will have to create it yourself.
2. Failed payments – doing your debits yourself you will have to follow up your own failed payments. This takes time and effort.  It also means that you are missing out on revenue!  In Australia the average failed payment rates for file runs is 8%.  In our business we achieve a failed payment rate of less than 1%. 
3. PCI compliance – The outsourced company is normally (not always) PCI compliant.  If you collect debits yourself then you have to make sure that you are PCI compliant. 
4. Charge backs – Outsourcing businesses liaise with the bank to manage the charge back process.  You would need to spend time managing this yourself if you were to bill with the bank.
5. Data back-up – We are constantly backing up our data, both internally and off-site.  You would need to ensure that this was accurate and consistent and that the back-up was readily accessible if needed for billing with the bank.
6. Disaster recovery – We have a disaster recovery site which allows us to undertake your billing even if our office systems go down.  You would need to review your current disaster recovery process and ensure that billing was covered by this.  Hey – don’t laugh – we had to put our disaster recovery plan into place earlier this year when the power went out in the whole block where our office is located.
7. Customer service – We provide access to a customer service team for businesses and their customers.  Our clients also have direct access to the senior team members in our business.  You will not have this with the bank.
8. IT support – By using an outsourced provider you do not have to rely on any internal IT support to ensure that billing is run and your revenue collected.  You know that we will undertake this process on your behalf no matter what IT support you receive internally.  If you did your own billing you would be 100% reliant on your internal IT support.
9. Management time – If you do billing yourself through the bank it does take a lot longer to manage.  When doing a cost analysis you need to include the staff time (including wages and on-costs) otherwise you aren’t considering the true costs.
10. Passing on fees – Most outsourced providers allow you to pass on the billing fees to your customers.  You will not have this option with the bank.
11. Legal compliance – Our business  is 100% compliant with ASIC and their non-cash payment rulings.  If you were to undertake billing yourself you would need to ensure that you are also compliant with this legislation.
12. Amex or Diners Cards– Some banks will not offer you the ability to transact on Amex or Diners.
13. Billing schedule management – You will have to manage the billing schedule yourself, so any changes you will need to make sure are updated and completed prior to billing.
14. Security – many banks ask for a security deposit to cover any transactions that may be charged back.  Can you afford to have that money sitting in a bank doing nothing?

 Food for thought?  Let me know what you would consider or why you made the decision to go one way or another.