Paperless Direct Debit enables organisations to sign-up customers to pay by Direct Debit as per the Bacs Direct Debit Scheme Rules. Rather than the customer having to complete and sign a paper Direct Debit Instruction (DDI) with an ink pen, Paperless Direct Debit allows the customer to give their authority via one of a number of different paperless methods.

Common Methods of Paperless Direct Debit

Computer Sign-up


The payer completes their details on-screen e.g. via PC, mobile phone or tablet or via an App.

Telephone Sign-up


The payer provides account details and authorisation for Direct Debit collection over the telephone.

Face-to-face sign-up


The payer provides account details and signs-up for Direct Debit collection in person.

Electronic signature

Either with a simple tick-box or using a third party provider such as Adobe or Docusign.


There are some other ways to take the Direct Debit Instruction without using a paper form (e.g. interactive TV) but these are less commonly used. The best paperless method for an organisation to use will depend on a range of factors which could include…

  • customer profiles,
  • industry or business sector,
  • transaction value,
  • administrative resources,
  • need for integration to existing systems.

The Benefits of Paperless Direct Debit

Paperless Direct Debit sign-up offers a number of benefits. It:

  • is convenient for payers e.g. it allows the payer to potentially sign-up when convenient (e.g. if online this can be done at the weekend / evening) and there are no forms to print and sign,
  • is convenient for the service user. It eliminates paperwork, associated admin and delays e.g. due to postage,
  • reduces postage costs – both for the organisation and the potential customer,
  • can allow bank details to be checked in real time, at point of capture, thereby reducing errors. Collecting bank details via the internet, telephone or face-to-face allows the Service User to perform a ‘modulus check’ and an ‘Industry Sorting Code Directory or ISCD check’ during sign-up. This can highlight incorrect details immediately so the payer can be prompted for correct details – preventing subsequent delays.
  • is a quicker, more immediate sign-up which can help increase sales conversions and ensure that the collections process can begin earlier,
  • can help present a modern and efficient company image whilst improving the customer experience.

Considerations with Paperless Direct Debits

It is the Service Users responsibility to perform validation checks – known as KYC (Know your Customer) checks. (These are strongly recommended if a Service User uses AUDDIS but mandatory if using paperless sign-up). The organisation must:

  • identify the customer/payer and ensure they are who they say they are,
  • ensure that the address provided is that of the customer/payer,
  • ensure the account number and sort code relate to the payer, and,
  • ensure the person is authorised to sign on the bank account.

Bacs produce a list of “Verification Measures” to help Service Users decide how to undertake these checks. Once the Service User decides what will be the best approach for their organisation, the sponsoring bank must approve this. Failure to undertake KYC checks may lead to unauthorised / fraudulent DDIs being set up and increase Direct Debit indemnity claims. You can read more about KYC checks on our resources page.

In addition, Service Users must consider their audit trail e.g. how they have captured and can demonstrate that they have obtained authority from the payer. The organisation must consider the wider reputational issues for the Scheme particularly with regard to the risk of fraud and a clear audit trail can help prevent any issues from arising.

Implementing Paperless Direct Debit

Before an organisation can use Paperless Direct Debits, there are a number of actions to take. The organisation must:

  • be approved by its sponsor BEFORE introducing Paperless Direct Debit sign-up,
  • have each different paperless method approved independently,
  • ensure all documentation e.g. telephone scripts /internet pages etc are approved by the bank (to ensure that the sign-up journey is replicable and scheme compliant),
  • be live on AUDDIS, to enable lodgement of the Direct Debit Instruction electronically, and
  • have appropriate, compliant software in place that can fulfil the scheme requirements (e.g. generate AUDDIS codes and validate references etc).

If your organisation is considering introducing Paperless Direct Debit – or a new PDD methodology, we can help advise of rules specific to the approach; typical timelines and considerations. See our Paperless Direct Debit implementation support page or Contact us to discuss.

Still Got Questions?

IOur payments experts have helped hundreds or organisations implement different flavours of Paperless Direct Debits. From simple guidance to complete project management we can offer practical and cost-effective solutions so get in touch today!