AUDDIS stands for Automated Direct Debit Instruction Service. It is a business to bank messaging service. It enables Service Users (the collecting organisation receiving the Direct Debit funds), to send new Direct Debit Instructions (DDIs) to their customers’ bank or payment service provider (PSP) electronically. This replaces the paper-based system where Service Users would post completed paper DDIs to the bank. It is mandatory for all new Service Users that submit direct to Bacs to use AUDDIS.
The Benefits of AUDDIS
There are a number of benefits to submitting new Direct Debit Instructions to Bacs electronically, rather than posting a paper DDI. These include:
- Reduces errors – automating submissions means that manual handling is reduced and fewer manual errors occur.
- Faster – electronic transactions arrive at Bacs the same day as they are sent meaning that the 3-day Bacs cycle can start sooner.
- Quicker turnaround to collection – a quicker lodgement timeline means collections can start sooner.
- Faster feedback – invalid accounts / instructions are identified and reported on the Bank Returned AUDDIS Report.
- Fewer Failures – submitting electronically avoids Direct Debit Instructions getting lost or delayed in the post.
- Cheaper – removes postage costs.
- Improved customer service – fewer manual steps, a shorter set-up time and a reduced chance of hold-ups because of re-keying errors.
- Enables other sign-up methods – it is the first step towards Paperless Direct Debit.
- Environmentally friendly – takes paper out of the banking system.
Considerations with AUDDIS
Service Users need to consider various factors, including:
- Can existing software generate the required AUDDIS codes? If not, what software – or bureau services – will be used?
- What will internal processes be with regards to timelines – i.e. when will transactions be sent to Bacs/ how will the required wait period be enforced before collections are attempted?
- How will identity checks / Know your Customer (KYC) checks be conducted? If a bank receives a paper DDI in the post they can check the signature on the DDI against the signature held on record for the bank account. In this way, the bank is responsible for performing the identity check. If the Service User sends the information electronically, the bank is unable to perform this check. The Service User is therefore strongly recommended to conduct an identity check. How will this be undertaken? (Remember, if operating a Paperless Direct Debit sign-up method it is mandatory to perform the KYC check – but it is still ‘highly recommended’ for AUDDIS Service Users).
- If paper DDIs are still used in the sign-up process, how will documents be kept e.g. how long will they be kept for? In what format and where will they be stored for easy retrieval if required?
These are just some considerations and others (e.g. sign-up method and industry specific factors) may apply. Remember, help is available to answer these and other questions!
Becoming AUDDIS Enabled
There are four steps on the journey to use AUDDIS:
- The application phase: applying to your sponsoring PSP. This involves completing an application form,
- The preparation phase: getting software, systems and internal processes ready to accept the new message format,
- The testing phase: to ensure you can make valid AUDDIS submissions via the Bacs Payment System,
- Go live: implementing AUDDIS.
For Service Users who already operate a Direct Debit system that is not AUDDIS enabled, the options are:
- To take out a new Service User Number which is AUDDIS enabled and run down the exiting, non-AUDDIS SUN, and/or
- Migrate the existing SUN to be AUDDIS-enabled. There is more information about this AUDDIS Migration on our webpage.