Direct Debit mandate

Bacs describes a Direct Debit as a customer's instruction to their payment service provider allowing an organisation to collect varying amounts, provided the customer has received advance notice of the amounts and dates. The mandate is that instruction. It carries the collecting organisation's name and service user number and the payer's account details, but not an amount or a date, because those can change. Mandates can be set up on paper, over the phone or online; the paperless routes require the organisation to be AUDDIS compliant.

Why it matters to a software platform: mandates are tied to the organisation that collects under them. A platform whose customers collect by Direct Debit through a separate provider has mandates that belong, in practice, to that provider's arrangement. Moving those customers onto Direct Debit built into the platform means either transferring mandates under Bacs rules, which is possible between service user numbers in defined circumstances, or asking payers to sign new ones. Which applies decides how Direct Debit customers move, and it is the first question in a payments review for any platform with recurring collections.

What to watch: the advance notice rule, normally ten working days before a changed amount or date unless the payer agreed otherwise, and the Direct Debit Guarantee, under which the payer's bank refunds an error immediately and recovers it from the collecting organisation.