Direct Debits Explained: What Is A Direct Debit Mandate?

Next up in our Direct Debits Explained series we are covering Direct Debit mandates, also commonly known as Direct Debit Instructions (DDIs). A key part of collecting a Direct Debit payment, a mandate is needed from every customer in order to give you permission to collect payment on a recurring basis. Mandates can be paper-based or paperless, which option is best for your organisation?

A Direct Debit mandate is an essential component of taking a Direct Debit payment. It is an authorisation from your customer / member giving you permission to collect future payments that are due. Mandates are also often referred to as a Direct Debit Instruction (DDI).

What Does A Direct Debit Mandate Contain?

A Direct Debit mandate will typically contain the following information:

  • Bank/building society details for the customer:
    • Name of account holder
    • Account number
    • Branch sort code
    • Name and full postal address of bank/building society
    • A reference for the payment
  • Your Service User Number (SUN) (or that of your payments provider)
  • Date of instruction
  • Instruction to the bank/building society from the account holder authorising the set up
  • The Direct Debit Guarantee wording

How Can A Direct Debit Mandate Be Set Up?

To set up a Direct Debit mandate a form must be completed in one of the following three ways:

  1. Online – an electronic mandate form is completed by the customer using bank-approved payment web pages
  2. Paper – a paper DDI form is completed by the customer
  3. Telephone – customer details are collected over the phone using a bank-approved script

Paperless vs. Paper Mandates

Paper mandates can appear easier if you are signing up customers in person – a form can be signed there and then giving you authority to collect payments. However, paper mandates come with some drawbacks:

  • If a customer is not signing up in person, you’ll need to post the mandate form, or the customer will need to download and print it then post it to you. This is slow, potentially costly and could even cost you a member as it leaves more time for a change of heart over signing up
  • Manually processing the form is time consuming
  • You’ll need to physically store the mandate – this requires space and, particularly with GDPR in place, you need to ensure this sensitive data is adequately protected

Paperless mandates are a robust option with many customers expecting sign up to be a quick and instant process.

Benefits of choosing paperless Direct Debit mandates include:

  • Lower overheads in setting up Direct Debit payments – less paperwork, no postage or storage costs and no manual data entry admin work
  • Enhanced data security – avoids transporting and storing sensitive customer data on paper
  • With online joining incorporating the mandate, customers can sign up at any time and any where
  • Electronic bank account and address data validation reduces errors, increases successful collections and avoids subsequent admin work

Robust Digital Joining Solution

At Harlands Group, we believe paperless, digital Direct Debit mandates are the most efficient and secure option when setting up customer membership payments.

With flexible options, from a standard brandable signup portal to a customisable integration into your own signup process, our online joining platform makes it simple to remove paper from your organisation.

Customers can signup and set up Direct Debit payments digitally in person or remotely at anytime, anywhere and on any device. This not only streamlines back office processes; bank account and postcode lookup verifications improve data accuracy.

A secure and fully PCI compliant solution, our online joining platform allows you to start collecting payments straight away with the option to take an initial card payment (and sell additional addons) – increasing your overall revenue. Plus, drive signups with limited time promotional offers.

Keep full real-time visibility into new member signups via your existing CRM or membership management software.

Learn more about how Direct Debits compare to the other options available for collecting membership payments