PaySmart establishes new benchmark for direct debits

Fitness industry direct debit provider PaySmart has created a set of standard benchmarks for the industry, aimed at making what companies offer transparent to their customers.
As PaySmart Chief Executive Ian Jones explains, says the idea arose during an audit of security systems and customer services.
"We were benchmarking ourselves against the payment card industry's international standards and it became clear that the direct debit industry itself had no clear standards or benchmarks of its own.
"We are a relatively new industry, so I guess the finance industry never got around to looking at this area.
"However, our research was showing that direct debit companies have widely different practices and our management team agreed that clients and potential clients should be aware of these things."
PaySmart extended its review to establish a set of benchmarks for direct debit companies.
As Jones explains "as you might imagine, this was challenging because we were devising something that would make us change the way we do things.
"We came up with ten benchmarks which we believe go to the heart of the direct debit business."
The benchmarks are designed to benefit clients.
The first two relate to security ï¾ being a trustworthy provider and being totally secure and PCI compliant.
"In a nutshell that's what a direct debit supplier must be. We are a finance sector industry and security and trustworthiness are absolutely, non-negotiably, top of the heap."
Jones explains that the third benchmark relates to the principal client benefit of direct debit services: secured, regular cash flow, stating "basically, it has to be a minimum requirement. Payments to client businesses have to be made as soon as practicable after a customer payment has been made."
'Structured to be no cost to your business' is benchmark four.
"We invented this practice many years ago and it has been widely copied. Direct debit works best when end use customers cover the cost of the service through an administration fee.
"Through structuring customer contracts to include this cost, our client businesses get the service free. It is an important benefit."
The remaining six benchmarks relate to the transparency of client costs and the ability to get on-line and IT support. "We live in a complex, changing world and clients and their customers inevitably need help from time to time. This is about ensuring that the process is smooth and hassle free."
Ian points out that gyms and health clubs are among Australia's leading consumers of direct debit services. It is generally acknowledged to be a zero cost way of offering payment options to members, while radically improving the business's cash flow.
He adds "that's a big motivator for the fitness industry. Our research shows clearly that the two biggest benefits businesses get from using our services are reliable cash flow and reduced administration through not having to constantly chase outstanding payments."
Ian says the recent enforcement of what are known as "merchant standards" by the Payment Card Industry (PCI), which represents credit card companies, provides another good reason for fitness businesses to use an external provider to supply direct debit services.
"The standards impose security levels for credit card data which are difficult for many businesses to meet, so this substantially increases risk for them," Jones adds.
"Fitness clubs that don't comply risk huge fines. Using us to collect payments transfers that risk to us but, since security is at the heart of what PaySmart does, it's no big deal. We are fully PCI compliant."
So, how does PaySmart match up to its own benchmarks? Jones explains "well, I said it would be challenging!
"We meet them (our benchmarks). We are a motivated team and we enjoy our work. We are a friendly voice when clients need help."
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http://www.ffapaysmart.com.au