Powering payments. Behind the numbers of our Direct Debit processing prowess

9th July 2024

5 minute read

Smiling female making payment on laptop with bank card

More businesses are recognising the tangible benefits of providing their customers with Direct Debit as a payment choice. In 2022 alone, there were 4.7 billion Direct Debit payments made in the UK. That’s 10% of all payments, with UK Finance predicting that figure to rise to 5 billion payments by 2032¹.It’s clear that in a time of increased digitalisation Direct Debit remains a familiar, long-established, and widely trusted way for consumers to pay for regular bills and services.

The business gains

There are numerous reasons public sector, financial services, utilities and other organisations may look to consider Direct Debit payments; the most obvious benefits include:

Improved cash flow: Switching customers to Direct Debit means you can guarantee the timing of incoming payments, ensuring a consistent and predictable cash flow
Reduced administration time and cost: Direct Debit means you don’t have to spend time issuing reminders and chasing payments, freeing up valuable resource and time in the process
No more lost or delayed payments: Payments can be difficult to track, can easily go astray or be delayed. With Direct Debit, you receive the payment on time, every time
Business planning: Predictable payments not only improve cash flow but also enable you to better plan business resources
Simpler and more convenient for customers: 77% of customers are positively disposed to Direct Debit, and for 62% of customers, it is their preferred payment method.²

14,878,038
Direct Debits processed (April 24)
£541,737,706
Revenue collected (Apr24)
180 million
Projected transactions (2024)
£6.5 billion
Projected collections revenue for clients (2024)

We’re a pretty big deal!

At Target Group, we're proud to be a trusted partner for financial services and public sector organisations, offering reliable Direct Debit processing solutions that support essential customer payments. Our work with big names like the BBC and the Driver and Vehicle Licencing Agency (DVLA) highlights our capabilities and the trust they place in us.

As a Bacs Approved Bureau³, we play a significant role in the payments industry. Bacs approved bureaux are organisations that submit Bacs and Faster Payment transactions on behalf of third party organisations. In April 2024 alone, Target Group processed 14,878,038 Direct Debit collections, totalling £541,737,706. Over the year, we expect to process over 180 million transactions, collecting around £6.5 billion for our clients.

This scale proves our efficiency and reliability in handling large payment operations. To put this into context, the Bacs Bureau reported 100,811,000 transaction volumes for all b2b Direct Debit payments, 133,937,000 for road tax, and 159,619,000 for television licence collections across all providers registered on the bureaux in their 2023 annual processing report⁴.

Keeping Britain moving

The DVLA wanted to transform the way customers pay for vehicle excise duty. Offering a Direct Debit solution provided an additional payment channel for the customer. The client had a deadline of 18 weeks to deliver a solution to meet government commitments following a procurement process. The high volume of transactions and the short timeline created a large challenge, and equally sizable opportunity, for the client. They partnered with Target Group based on the strength of our technical expertise and skill with ecosystems.

Our solution created a secure, robust, reliable, and resilient online service to support Direct Debit payments by customers. It also supported transactions through third-party, over-the-counter service providers, and supplied a contact centre solution for use by the client’s staff.

The new payments service has been a consistently high performing and successful solution:

Performance exceeds a 99.5% uptime
Collected over £18.5 billion in revenue and an average of 1.325 million Direct Debit mandates successfully set up each month
The direct debit feature has been used by more than 31million motorists.

Collections with empathy and innovation

But it’s not just about numbers. We understand that customers have diverse and unique circumstances. Our collections approach balances empathy with efficiency, ensuring we protect revenues while treating customers fairly. Our collections services include automated payment processing, online self-service options, and tailored repayment plans to reduce processing times and enhance customer satisfaction. With a recent client satisfaction score of 4.1 out of 5, we’re committed to delivering exceptional service and results.

Why not DIY it?

Of course, you can choose to set up Direct Debits payments yourself, which will mean you’ll need to adhere to the Direct Debit Scheme rules. Choosing to outsource to a Bacs Approved Bureaux like Target Group for Direct Debit collections offers key benefits, not least agility and scale:

Agility: Set up capability quickly for enhanced customer outcomes
Scalability: Efficiently handle any volume of transactions, big or small
Cost-effective: Pay per collection, avoiding the high costs of direct submissions
Expert compliance: Ensure secure, error-free processes with professional oversight
Reliability: Robust contingency plans keep payments flowing smoothly, even during system issues.

This approach simplifies operations, ensures compliance, and scales with your needs.

The smart choice for seamless payments

Choosing Target Group means you’re partnering with a leader in Direct Debit processing who understands the importance of balancing collections revenues with outstanding service. Here's what this means for you and your customers:

Seamless payment processing: You’ll benefit from our proven track record of handling massive transaction volumes with precision. With over 180 million transactions and £6.5 billion processed annually, we ensure your payments are managed smoothly and reliably
Enhanced customer experience: Our tailored solutions, including automated payment processing and online self-service options, enhance customer satisfaction. We handle everything from payment plans to customer communications, ensuring a seamless experience
Expertise you can trust: Our longstanding partnerships with organisations like the BBC and the DVLA highlight our expertise and the trust placed in us. With SLAs consistently met and rapid response times, we deliver professional and dependable service
Comprehensive support: From managing vulnerable customers to handling complaints and account administration, we provide comprehensive support throughout the collections and arrears lifecycle, backed by our FCA regulatory permissions and bank-grade risk and compliance.

Want to know more?

If we’ve piqued your interest and you’re ready to explore how integrating Direct Debit payments can help optimise your business revenues and transform your customer experience, we'd love to chat. Get in touch here.

Sources