Yes it will be, it’s part of the payment scheme
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Just to add to this as well:
When Monzo launched the current account preview, a big part of the testing was specifically to try setting up Direct Debits using the new sort code to test which merchants rejected the sort code or had errors in the setup.
This was to ensure that all the biggest and most common companies to use Direct Debits were tested and verified as working, so the launch could go smoothly once everyone’s new account was rolled out. The testing period allowed Monzo to directly engage with those merchants that had out of date sort code databases, and help them update their processes to ensure they could accept Monzo accounts. There was even a thread here on the community to track it.
So it’s not like Chase wanting to test Direct Debits with a subset of customers is crazy at all, it makes lots of sense.
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It wasnt testing, it was a problem with merchants not updating (aka outside Monzo’s control) and if I recall Chase are using an existing sort code JP Morgan had not a brand new one that wont exist?
It will be interesting to see how it goes I guess, they may have more beta things that are separate from normal bank DD use.
Chase are using a new sort code which has been allocated to JP Morgan Europe (the legal name of the company which operates Chase UK). With any new sort code, or even an existing sort code being switched on for a new payment scheme, there is a period where you need to wait for merchants to update their databases in order to accept it (most only update with a frequency of, at the most, monthly).
My guess is (although I don’t know, obviously) that Chase want to try and get this bedding-in period sorted as part of the beta and then only launch Direct Debits when they are confident that the vast majority of merchants will accept the sort code.
Otherwise, imagine how bad it would look if they promoted that they now have Direct Debit support, “normal” (non bank-enthusiast) customers went to try and set them up at various businesses, and then they all failed! It would not go down well.
Far better to start in this limited capacity.
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I didnt think that was how it worked, it was far more that the number monzo had didnt exist in the list of all the sort codes out there unlike the JP one (JP Morgan Chase is Chase) which does, it was why I suspect they may have used the existing one in the first place to avoid potentially a year (or even longer for crazy mechants) of issues. I actually thought they were smart to use one already allocated to their company to avoid it.
If you are correct then there will be issues for a long time… we will see I guess. I hope you are wrong to be honest as it will be damaging when trying to get non enthusiast customers. Hell some merchants didnt get it sorted until their customers complained about it and I remember some saying Monzo wasnt a real bank (even though it was) because of this. If you are right it will be damaging for the brand given they are going for the less young fintech people who want the idea of a big bank and I certainly wouldnt move my DD over if that turns out to be true because of the potential pain. Younger folk would tend to move companies, older just wont stick with the bank.
I guess we will know when it starts to roll out.
Yes, how it works is that there is a “master database”, which lists every valid sort code and which payment schemes are available or not for that sort code. It also lists the bank which the sort code is associated with, the address of the bank and the phone number that can be used to contact that bank. This database is called the Extended Industry Sort Code Directory (EISCD).
All merchants that want to collect Direct Debits or otherwise need to validate sort codes can buy access to this database from Vocalink (they maintain it) so you have to wait for merchants to update their copies of the database and their processes (web forms programmed to reject “invalid” sort codes and so on).
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The sort code was created for Chase in the same way the BIN on their cards was created for them.
Thankfully merchants and acquirers are now pretty used to new sort codes and BINs and it’s not as problematic as it used to be.
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Far more comprehensive than my reply 
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Haha, although I was only able to give that detailed reply thanks to the knowledge I’ve picked up over the years from this community!
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Eeeep fingers crossed it goes better and merchants are faster, that monzo list still seems to get the odd edit years later.
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On this point specifically, you weren’t completely wrong. What you were probably thinking of was the historic sort code “ranges” allocated to clearing banks.
So, for example, the 20s range is Barclays, 30s Lloyds and TSB, 40s HSBC and NatWest have the 50s and 60s. A very crude sort code checking implementation may try to process any sort code that starts with a common bank number like that, although I doubt it as most businesses would buy the database and do it properly.
When Monzo first started, the 04 starting number was completely new for a sort code, which may have thrown some very archaic systems but it isn’t the huge deal you were maybe thinking it was?
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It was a while ago so I have probably conflated the 2 issues as it was all new then. I remember people had issues getting paid as well because of it being a new sort which leans into what your saying above.
Having seen some merchant and pay roll systems I am not surprised their were issues.
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Getting paid would generally be through BACS Direct Credit (or maybe Faster Payment) and, again, possibly large companies with custom payroll systems may have needed to wait for a system update which incorporated a newer version of the database to “recognise” Monzo.
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That was the response some got 
Indeed, with what was actually happening (and why the system would cause an error) being that looking up the sort code for Monzo would have returned a “does not exist” if your database was out of date.
There is a summary of the main sort code ranges on Wikipedia and a checker which reveals which payment schemes are enabled for a sort code on the Faster Payments website. Starling’s website also lets you check sort code addresses (which is useful when filling in paper Direct Debit mandates) and whether or not a bank supports the switching service.
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Hah… it what my City Council says when I amended DD details for Council Tax. Lady told me twice that her computer not accepting Monzo details. But looks she was smart and amended details manually
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I’m actually curious about how sort code allocations work - because NatWest have the 60- range, but Starling’s is 60-83-71 and now Chase is also in the same range. Does NatWest have any involvement with those banks?
The Wikipedia article says that new banks are given an 04 one.
It is not quite as simple as NatWest “owning” the whole 60 range.
Historically, they did have the whole range and other banks within that range would have some payments cleared through NatWest on their behalf (usually international payments, via SWIFT, and often cheques as only cheque-clearing banks could clear cheques).
Nowadays, quite often banks will have nothing to do with the bigger bank that they appear to “share” a sort code range with, and will clear all their own payments, with the possible exception of SWIFT payments only.
The 04 range is a new range where codes are allocated 1 by 1, instead of in ranges, to new banks. This range is restricted as it can’t be used to clear cheques - so that’s why it’s referred to as the “utility bank” range.
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We still rely on NatWest for a few things - cheque clearing for one!
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I think it used to be. As you point out, “correspondent” banks used to be responsible for a whole bunch of things. Look at building societies: most of them (Nationwide being the honorable exception) will have sort codes in clearing banks’ ranges.
Starling also has an 04 range (04-00-40 ‐ what could possibly go wrong with that?) but I imagine it was easier to take a sort code from Natwest at the beginning, given they also relied on them for cash deposits.
This is new information. I promise I’m not picking on you but can you provide a reference or source for this? The way that contemporary banking works, I’d be incredibly surprised if an accident of sort code meant that Monzo could never join the cheque imaging scheme…
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