Insurers are about to reap the benefit of a paperless system set up to handle direct debit payments.

The system allows direct debits to be set up over the telephone, internet or during a face-to-face interview.

It was successfully piloted by Pinnacle Insurance in the past two years and is being launched nationwide.

Insurers are one of the largest users of the direct debit system, accounting for 42% of the 1.7 billion automatic payments processed each year.