You may wish to manage Direct Debit collection in-house or to have more control over the payments process and customer experience than a third party provider typically gives you. To do this you will need to be a Direct Debit Originator. This guide will walk you through becoming one.
What is a Direct Debit originator?
A Direct Debit originator is an organisation which has been authorised by a bank to submit payments directly to the Bacs. This means you can collect Direct Debit payments yourself – without needing a third party provider.
To become a Direct Debit originator and start collecting Direct Debit payments yourself you need to have a Service User Number (SUN). This guide explains what a Service User Number is and how to get one. Before reading this you may find it helpful to read our guide on the three options for getting access to Direct Debit.
What is a Service User Number?
A Service User Number is a unique reference which identifies organisations collecting payments by Direct Debit. You must have one to collect Direct Debit payments from your customers. It allows your customer’s bank to:
Find the name to display on your customer’s bank statement
Request refunds or make complaints
Find out details about the organisation collecting the payment
How do you get a Service User Number?
You can either get your own SUN or use a third party provider’s in one of three ways:
1. Via a bureau - A Direct Debit bureau can either set up an SUN for you or you can use their SUN to collect from your customers.
2. Via GoCardless - GoCardless either sets up an SUN for you or lets you use our master SUN to collect from your customers.
3. Via your preferred bank – This gets you your own SUN, rather than using a third party's. The application process is more difficult, and outlined below.
How to get an SUN from your Bank
1. Meet with your bank
Typically, banks will refuse your request unless you have revenues >£1m. (For some banks this can be £10m.)
The reason for this is that access is a large responsibility and takes a lot of work from the bank's end.
To find out more, you can talk to your relationship manager at the bank.
2. Submit a business plan
This should outline your business, metrics, and business case for using Direct Debit.
The outcome from here will be either a rejection or they will invite you in for further interviews.
3. Apply to the bank's credit and risk teams
This is detailed and will involve you going through lots of processes and explaining why you will be a safe and responsible user of the SUN.
The application will generally take 4-12 weeks.
If approved, you may be asked to be FCA regulated.
Finally, they will probably ask for personal guarantees and a bond of £50-500k.
Should I get my own Service User Number?
|Your own SUN||Your own SUN via GoCardless||Third Party SUN|
|Best suited to||Large corporates taking paper Direct Debits.||Large corporates taking 500+ payments a month.||Smaller businesses, and anyone looking to automate payments.|
|Set up time||
||Medium. 4 weeks through GoCardless||
||Low. Free through GoCardless||
|Setup requirements||Difficult. Banks may ask you to put down a large bond (c. £100k) with a bank, and provide evidence of a long trading history.||Simple. No bonds or trading history documentation is required.||Simple. GoCardless allows anyone to sign up. Bureaus have some stricter requirements.|
|Automation||Difficult. There are few off the shelf systems for automating and taking payments online. You are likely to have to build it yourself.||Easy. GoCardless Pro lets you automate the payment process while keeping the control over the customer experience you need.||Easy. You can use a provider's existing automated system. GoCardless is the expert in online, automated payments.|
|Cost per payment||
||Varies. See our pricing plans||
|Admin time||High. Requires 1-3 employees, depending on the size of your business.||Low. A few hours each week or month.||Low. A few hours each week or month.|
|Expertise needed||High. You will need high levels of expertise in the Direct Debit scheme, with ongoing training.||None.||None.|
|Name on your customers' bank statements||Your own. Your business name only.||Your own. Your business name only.||Your provider's name. This will always appear. Some can also show your business name.|
Once you have decided whether you want to get your own SUN or use a third party provider, our 60 Second Guide will help you work out which provider to use.