Published on Thursday, December 22, 2011
This important change was prompted by
an increase in new sort codes issued in the UK as growing
numbers of new financial institutions and products enter the
market. The Payments Council is particularly keen
to assist businesses and charities in their efforts to ensure the
correct sort code references are entered into their database.
Without point-of-entry validation, any
customer's sort code could be incorrectly imported and rejected,
potentially causing issues for the customer and a loss of income
for that business or charity.
The Payments Council believes that imposing a best practice of organisations updating their sort code databases at least once a month will help ensure that those organisations are protected against failed automated payments.
Typically, business and charities check sort codes via a database updated by downloading data from their payment solutions supplier. Benefactors provide their bank account number and six digit sort code to pay by Direct Debit or be paid by Bacs Direct Credit. The change in best practice involves a change in Bacs Payment Scheme Rules, meaning that payment originators (organisations) will no longer be able to rely on quarterly updates to their sort code data.
Hilary Plattern, Director of Strategy for the Payments Council, says, "Whether you are a satellite TV supplier or a small charity, if you accept automated payments from customers it is critical that the system you use to check a new customer's sort code is correct and is kept bang up-to-date. If it isn't and a sort code is wrongly rejected, a customer's patience can be tested and their business can quickly be lost. We are trying to make contact with every business and charity that could be impacted. Anyone wanting to find out more can contact their bank, a commercial provider or VocaLink."
Learn more about Sort Code Validation >>
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