New independent market research by industry analyst, Redshift Research, on behalf of Bottomline Technologies (NASDAQ: EPAY) has found that almost a quarter of UK individuals (23%) have experienced a problem setting up or amending a Direct Debit (DD) or Direct Credit (DC) in the last 12 months, with 14% of consumers cancelling a policy or subscription because the DD set-up process was too complicated. With nearly 6 billion payments processed every year, and each failed transaction around £50.

The survey, which sampled the views of 200 UK financial decision-makers and 1,098 UK adults, also found that on average 95% of failed DD/DC transactions are due to human error, with 71% of finance departments citing errors with either the bank account number or the sort code as the most common reason for the transaction to fail.

Whilst 71% of businesses recognise that failed transactions damage customer and/or employee relations, businesses also need to take into account the significant cost of each failed transaction. As many as 60% of business admitted incurring a cost of £50 or more for every failed DD transaction, whilst 43% of finance departments spend more than 4 hours a month, and 11% spend more than 10 hours each month, fixing problems with DD transactions.

Furthermore, 51% of businesses believe that verification and validation software reduces cost of managing customer queries; delivers better cash management visibility (42%) and provides better customer acquisition and sign-up process (40%). (The Bottomline Technologies plug.)

Financial Services, Utilities, Telco/mobile and membership companies are amongst the top five industries where consumers have experienced problems.

Fraudulent activity
The survey also found that fraudulent activity is the most time consuming error that finance departments experience (28%), with sort code errors and bank account number errors ranking as second and third respectfully.

Extraordinarily, 6% of consumers admitted to intentionally completing a DD mandate incorrectly, with 45% of these respondents deliberately using the wrong bank account number and a third of these putting the wrong sort code or address details down.