General Questions About Direct Payment
Questions Your Individual Customers Might Ask
Concerns Your Individual Customers Might Have
Questions Your Business Customers Might AskConcerns Your Business Customers Might Have
General Questions About Direct PaymentWhat is Direct Payment?Direct Payment is the safe and accurate ACH electronic transfer of an authorized payment from an individual customer's checking or savings account into the account of a company or organization. What types of companies and organizations offer Direct Payment?More and more companies now offer Direct Payment to manage recurring payments of all sizes, from mortgage, insurance, and automobile financing payments, to investments, monthly utilities, magazine subscriptions, and health club dues. How many people are using Direct Payment?The number of people enjoying the benefits of Direct Deposit is on the rise. More than half of all households use Direct Payment for at least one recurring payment. In 2007, almost 3.5 billion payments were made by Direct Payment. Are there any other names for Direct Payment?Some companies may refer to Direct Payment as automatic bill payment, automatic debit, electronic bill payment, or direct debit. To avoid confusion, always refer to Direct Payment by name when discussing it with your staff and customers. Questions Your Individual Customers Might AskHow do I sign up for Direct Payment?Your individual customers may have received information about Direct Payment with their monthly bills. Advise them to let each of their billing companies know that they want to sign up, by completing authorization forms that may have come with their bills, or calling the companies that send them bills directly. How will I know the dollar amount that will be deducted from my account?The dollar amount can be fixed or variable. If the amount varies and the individual has not signed a variable amount authorization, the billing company is required to send a written notice of the dollar amount to the individual at least 10 days prior to the scheduled payment date. How will I know the date the payment will be deducted from my account?A scheduled payment date will be established when your customers sign up for Direct Payment. If the payment is going to be deducted on a different date than the one scheduled, the billing company is required to send a written notice seven days prior to the scheduled date. Will I still get a monthly bill from the companies?For most monthly bills, the answer is yes. Advise your individual customers to ask their billing company this question to be sure. Some companies do not send a monthly bill since one of the purposes of Direct Payment is to reduce paper. Those companies may send a yearly payment summary. What if my payment date falls on a holiday?If the payment date falls on a holiday or other dates when financial institutions are closed, the payment will be debited on the next business day. Will Direct Payment cost me money?No. One of the benefits of Direct Payment is that it will save your individual customers time and money in postage, checks and even late fees. Do I need a computer or Internet access to use Direct Payment?No. Inform your individual customers that they don't need a computer or Internet access to use Direct Payment. Once they set up Direct Payment, their bills are paid automatically - on time, every time. Whom should I notify to cancel Direct Payment?Your individual customers will need to call their billing companies directly - they will need to cancel Direct Payment with each company separately. Concerns Your Individual Customers Might HaveWhat if I have a problem?Problems with Direct Payment are rare. But if any questions should arise, advise your individual customers to simply contact the companies that send them bills. The problem can usually be corrected immediately. What if I don't have enough money in my account when the Direct Payment is posted to my account?Your individual customers must have the money in their accounts for Direct Payments in the same way that they must have funds in their accounts when writing checks. If they do not have enough money in their account, their bank and the companies that send them bills may charge them extra fees. What if the wrong amount of money is taken from my account?Problems with Direct Payment are rare and generally easy to correct. If your customers do encounter this problem, inform them that they should notify the company they paid using Direct Payment. Assure your customers that they are protected under federal law and can stop or reverse a payment they believe was made in error. What prevents a billing company from accessing my account whenever it wants to?Federal law (Federal Regulation E) protects your individual customers from unauthorized debits from their checking and savings accounts. With Direct Payment, customers have the right to stop or reverse a payment they believe they did not authorize or was made in error. With Direct Payment, won't more people have access to my personal account information?No. Once your customers authorize the use of Direct Payment, the information that they provide simply becomes part of the transfer information read by computers. No one needs to know or refer back to that information. Questions Your Business Customers Might AskIsn't Direct Payment just for large companies?Businesses of any size can benefit, and should be offering Direct Payment for many reasons, including the fact that consumers are expecting it as a payment option. Do my customers really want Direct Payment?Many customers want Direct Payment because it simplifies their lives and takes the hassle out of paying bills. In fact, in 2007, almost 3.5 billion payments were made by Direct Payment, an increase of 3.6 percent over the previous year. Concerns Your Business Customers Might HaveWill it cost my company money to offer Direct Payment as a payment option?As with any new system a company puts in place, there will be initial payment costs to set up Direct Payment. These costs will seem small to your customers, once they realize the cost savings of Direct Payment - an average of 11.5 cents per payment (versus checks) due to reduced processing costs. Will my company lose the money that it collects in late fees?There may be a dip in late fee revenue, but your business customers will gain loyalty from their customers. And collecting money from customers may also cost businesses money. With Direct Payment, your corporate customers pay less for collections and consistently have more of their money on the due date. |
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