FCA Regulation & Direct Debit Payments

We expect that our bank will be authorised and regulated by the Financial Conduct Authority (FCA), but what about the Direct Debit payments provider your organisation chooses?

Not all Direct Debit collection companies are FCA authorised as it’s not a business requirement. However, choosing an FCA authorised provider is vital to both to protecting your business and to giving members the experience they deserve. Here’s why…

The FCA & Authorised Payment Institutions

The FCA regulates the conduct of 59,000 financial services firms and financial markets in the UK. The regulator seeks to make markets work well for all involved – individuals, businesses of all sizes and for the economy overall.

An authorised payment institution is an entity authorised as a payment institution under the Payment Services Regulations and included in the Financial Services register. Direct Debit payments providers, such as Harlands Group, can be authorised as a payment institution.

Choose An FCA Authorised Direct Debit Payments Provider

Most, if not all, health and fitness operators rely on membership fees to keep up and running. Choosing an FCA authorised Direct Debit collections provider protects this vital income for your organisation.

Further still, it means your provider is held to the highest standards of conduct when handling your Direct Debit payments. And will always treat you and your members respectfully and fairly with no hidden fees or tough contracts.

Protecting Your Money

When working with a Direct Debit payments provider, members will either pay directly into your account (if you have your own Service User Number for collecting Direct Debits) or to your provider. Most operators choose the latter with the member payment taken by the Direct Debit payments provider, the income is then paid to the operator on an agreed date.

Choosing an FCA authorised payment institution helps ensure your income is protected when the provider receives membership fees on your behalf.

Direct Debit payments from members go straight into a ring-fenced account. Your income is segregated away so the provider cannot access or use it for their own purposes (e.g. for investment or to pay its own business expenses).

In effect, if the provider goes into administration or even liquidation, you can rest assured that your organisation and income is protected. Choosing a Direct Debit payments provider who is not FCA regulated and working with them in this way could put your income and your organisation at risk.

Securing Your Data

Hardly a week goes by without a high-profile data breach hitting the headlines. IT Governance reports 88% of UK businesses suffered a data breach in 2018, and that beyond the financial cost of dealing with a breach, brand reputations can be seriously impacted.

When outsourcing membership payments to a third party you are trusting your provider to securely handle member data. And, ultimately, putting your brand reputation in their hands.
FCA regulated Direct Debit payments providers are required to ensure that both client and member data is always secured to maximum provision. Giving you peace of mind that your organisation and members are protected.

With data most at risk where members join and where accessible on premises, an FCA authorised provider will ensure that data is protected both online and offline.

Keeping Your Business Running Smoothly

Security of your money and data are hugely important benefits of working with an FCA regulated Direct Debit payments provider. Beyond these benefits, choosing a regulated firm allows you to carry on processing member payments as normal even if something should go wrong.

FCA authorised payments institutions are required to have continuity plans in place to ensure that you can keep taking member payments. So, your business always runs smoothly and member experience is not compromised.

Putting Your Members First

Beyond security benefits, choosing an FCA authorised Direct Debit payments provider allows you to rest assured that your members are always treated fairly.

Your payments provider should operate in such a way that the member is always treated with the upmost respect and that accounts for their personal circumstances. Any fees applied should be in line with the agreed contracts you have in place with a member and communicated clearly in a timely fashion.

Processing Direct Debit Payments In-House

Are you one of the 70% of health and fitness operators in the UK processing Direct Debit payments internally? Most operators simply don’t have the resources and knowledge in-house to meet the same standards an external FCA regulated provider would.

Gaps in security along the member journey both online and on site could leave you exposed to data breaches. If you do not have adequate contingency plans in place your member payment processes could be disrupted should something go wrong. Business continuity could be particularly at risk for organisations where member payment procedures sit internally with just one employee.

FCA Authorised Direct Debit Payments

At Harlands, we are proud to be an authorised payment institution (find us on the Financial Services register) regulated by the FCA. We are also a Bacs accredited facilities provider and ICO registered. So, when you choose to work with us you know your income and members are in good hands.