14/09/2021

What is mandate management?

By Mariana Almeida Marques

If your business model is based on subscriptions, you may already be familiar with Direct Debit mandates. Companies need their customers’ written approval so they can set up recurring payments and start taking money from their account on a regular basis. This approval must be managed, updated and stored safely, even when contracts are no longer active. In this article, we will discuss mandate managements and how Imburse can help you optimise your mandate management operations.

 

What is a payment mandate?

A mandate is an agreement or “instruction” in which the payer authorises the payee to debit a sum of money from their account on a regular basis. In Direct debits, for instance, the customer agrees to let the company take a certain sum out of their account monthly or quarterly, in exchange for an ongoing service- think bills, subscriptions or insurance policies. The mandate simply represents the contract between these two entities. You can read our previous article if you are interested in knowing more about what are recurring payments and what to consider if you would like to offer recurring payment services to your customers.

Mandates are agreements in which customers authorise merchants to set up Direct Debits.

 

What is mandate management?

Recurring payments allow customers to sit back and enjoy a service without having to actively pay for it, as the payment is automatically taken from their account. It also prevents them from missing payments and dealing with the burden of late payment fees, which is equally . This system is equally beneficial for merchants, as it takes a lot of weight off the merchant’s shoulders.

Nevertheless, there is quite a lot of work involved in setting up, amending, storing and cancelling mandates. Subscription-based companies in particular need to manage a large amount of mandates and ensure that payment operations run seamlessly. Mandate management are a priceless helping hand in delivering fast payment experiences and promptly dealing with customers’ requests.

 

Mandate management services

Though recurring payment services don’t require much active work on the customer side, there are quite a few responsibilities for merchants behind the scenes. These responsibilities depend on where your business is based. SEPA Direct Debits, enabled for all 36 European countries that are part of the SEPA region, requires paper and electronic mandates to be stored by the merchant. In the UK, on the other hand, mandates must go through the Bacs system and must be stored by the payer’s bank.

Generally, merchants have some responsibilities in dealing with the storage, amendment and cancellation of mandates. Mandates aren’t irrevocable, so both the customer and the merchant can amend the mandate at any time and both parties will be notified. Merchants are responsible for storing all updates to the mandates and informing their bank about any changes.

Mandates can be amended or cancelled by the customer at any time.

Mandates can also be cancelled at any time. If your customer decides to cancel the contract, your customer’s bank will inform your own bank so that automatic payments cease immediately (providing that there are no pending payments, in which case all pending payments must still be collected). Merchants are also responsible for storing the cancellation of contracts/mandates. SEPA Direct Debits mandates must be cancelled automatically by the merchant after 36 months of inactivity.

 

How Imburse can help

By connecting to Imburse, you can instantly access Bacs, the system responsible for handling all Direct Debit transactions in the UK, and easily create, register, amend and cancel mandates electronically. A modernised and automated mandate management system will allow you to improve operational efficiency, easily manage your mandates and ensure you deliver seamless payment experiences to customers.

Imburse offers connectivity to the entire payments ecosystem. By connecting to our platform, you can easily and quickly deploy any payment method or provider, in any market, effectively saving on costs, time and your own resources. Not only do we offer you instant access to providers, our marketplace is packed with all the payment tools you need to fully optimise your payments system- including mandate management.

If you are interested in our solution, reach out to us below. Our team will be happy to show you all of  Imburse’s functionalities and offer you a free demo.

 

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