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Direct Debit Timing Changes

On July 18th, Quoox will be making some minor changes to the timings of the Direct Debit payment sequences for memberships.
All facilities who use Direct Debits for membership payments should familiarise themselves with this change. 

A GoCardless guide on Direct Debits and how they work can be found here.

Background

Within Quoox, the payment plan date is (and has always been) the date upon which a payment request is submitted to the merchant.  The merchant is either Stripe (for card payments) or GoCardless (for Direct Debits).  The process that then follows is down to the mechanisms for card payment and Direct Debit processing.

Direct Debits are based upon the old BACS system from the 1990’s, and has changed little since.  This is essentially a three day process:

Two other factors come into play with Direct Debit timings:

  • The strict rules regarding the charging of Direct Debits require advance notification to be sent. When this is required, this is send 3 days prior to the charge being applied and, thus, may further delay the charge.
  • BACS is subject to bank trading days, and does not operate on weekends or bank holidays. Therefore, payment timing might be extended due to where it falls in the week.

A point of difference, and common area of confusion

Some more basic CRMs use subscriptions to manage the collection of Direct Debits.  Whilst these have there advantages, they are insufficiently flexible for the current (and future) mechanisms in which Quoox uses DDs.

The operation of subscriptions is different to the “on-demand” method used by Quoox, and the inherent timing differences have resulted in a few customers expecting funds at a different point to that which transpires.

The timing change

On 18th July we shall make two changes to the way in which Quoox processes membership payments where the member has an active Direct Debit mandate:

  1. Quoox will no longer send the pre-charge emails. Instead, GoCardless will continue to send notification emails as and when it determines it necessary to maintain compliance with the strict Direct Debit scheme rules.
  2. Where a member has an active Direct Debit mandate, Quoox shall submit the payment request to GoCardless 3-days earlier than it presently does.  Subject to the influences of weekend and bank holidays, this will move the members charge point to be closer to (and typically on) the payment date set in the Quoox payment plan.

For avoidance of doubt

For absolute clarity, there are several factors that effect the timings of Direct Debit charges and the payment of funds. This change will mitigate some of these factors, but the timing will still be subject to weekend and bank holidays.

As with all Direct Debit users (such as your utility companies), customers should describe to their customers in terms of “charged on or around x date” as specific charge dates cannot be guaranteed by the Direct Debit process when used for subscriptions in this manner.

Things to be aware of

This change will effect every customer who charges using Direct Debits, but should not have any detrimental effect on any one (customer or member).

From the member perspective, charges will happen closer to the pre-advised date and thus any queries of “you took the money earlier this month” should be readily resolved without drama.

From the customer perspective, due to the charges likely happening as many as 3 days soon (and typically on the charge date set in the payment plan), customers will typically receive funds a few days sooner.

If you have already amended your payment plan dates to manually counter the timing offset, please contact your Quoox account manager for guidance.

Card payments

Payments by credit or debit card are wholly unaffected by this change. Stripe charges a card the moment the request is received from Quoox, and immediate success/failure feedback is returned.

Upon successful charging of a card, Stripe will then make payment of the funds on the schedule assigned to that customer (and determined by Stripe’s algorithms, in which Quoox plays no part).

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