Direct Debit Service Can I Apply for Paperless Direct Debit (PDD) Service

Despite the introduction of PDD to New Zealand banking rules, Flo2Cash still strongly recommends that where possible a standard Paper Direct Debit Authority form is completed by the account holder. Paperless Direct Debit transactions carry a much greater risk.

You need to carefully considers;

• Your business relationship with your customer
• The associated risks paperless direct debit transactions carry
• Your processes to identify and authenticate your customers
• Your refund policy

Listed below are some industries that are considered not suitable to use paperless direct debit service because of higher risks associated with them:

• Christmas club and similar operations
• Door-to-Door merchants
• Bureau de Change services
• Payroll Services
• Lay-bys
• Debt collection and recovery services
• Gambling
• Mobile prepaid phone top up
• Entertainment or personal services
• Or any other business where there is a higher propensity or opportunity for services to be easily converted to cash
• Any one-off service that is of a significantly high value

Essentially the inappropriate industries or services are areas which place your business at additional risk. Generally such services are one-off transactions and as such there may be no ongoing transactional or contractual relationship with the customer.

If an instruction lodged for such a service is found to be fraudulent, that is, the customer is not the owner of the nominated account; your business may be exposed to significant financial loss.

Give us a call to find out if your business can take advantage of paperless direct debit.