What is mandate management?

As an insurer, you may already be familiar with mandate management. They are an essential part of adequately managing your customers’ direct debit mandates and enable you to keep track of all contracts and recurring payments from your customers. A mandate represents an agreement or approval from your customers, by which they accept to have recurring billing on their bank accounts. This approval must be managed, updated, and stored safely, even when contracts are no longer active. In this article, we will discuss mandate management and how Imburse can help you optimise your direct debit mandate management operations. 

What is a payment mandate? 

A mandate is an agreement or “instruction” in which the payer authorises the payee to regularly debit a sum of money from their account. 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 it and what to consider if you would like to offer recurring payment services to your customers. 

What is mandate management? 

Recurring payments allow customers to sit back and enjoy a service without actively making payments for it, as the payment is automatically taken from their accounts. It also prevents them from missing payments and dealing with the burden of late payment fees. This system is equally beneficial for insurers, enabling them to collect money from customers automatically.  

Nevertheless, much work is involved in setting up, amending, storing, and cancelling mandates. Insurers, in particular, need to manage many mandates and ensure that payment operations run seamlessly. Mandate management is 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, insurers have quite a few responsibilities 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 payee. In the UK, on the other hand, mandates must go through the Bacs system and be stored by the payer’s bank. 

Insurer’s responsibilities in managing mandates  

Generally, insurers are responsible for dealing with mandates’ storage, amendment, and cancellation. Mandates aren’t irrevocable, so both the customer and the insurer can amend the mandate at any time, and both parties will be notified. Insurers are responsible for storing all updates to the mandates and informing their bank about any changes. 

When can mandates be cancelled? 

Mandates can 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). Insurers are also responsible for storing the cancellation of contracts/mandates. SEPA Direct Debits mandates must be cancelled automatically by the insurer after 36 months of inactivity. 

Types of mandate amendments  

There are three categories of mandate amendments: client, company, and bank. This means that all three entities can amend their contracts, including changing dates, personal information, or cancellation. The client amendments refer to amendments made by the insurer’s clients. Banks can also make changes to these contracts.  

Direct debit bank networks 

Various payment networks process direct debit payments. Below are some of the most known: 


As mentioned previously, SEPA enables easy bank transfers within certain European countries. It has 36 member countries, most of which use the Euro as their currency. The country members are Austria, Belgium, Bulgaria, Cyprus, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Republic of Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovenia, Slovakia, Spain and Sweden, the 3 EEA countries of Norway, Liechtenstein, Iceland, and also Switzerland, Monaco, and the United Kingdom. 

SEPA’s goal is to make European international payments as easy and convenient as national payments. For that, the European Payments Council (EPC) created three separate SEPA payment schemes: SEPA Direct Debit (SDD), SEPA Credit Transfer (SCT), and SEPA Cards Framework (SCF).  

SEPA Direct Debits are pull-based, meaning that the insurer is responsible for initiating the payment once its customer has signed the mandate and approved the recurring payment. They are also bank-to-bank, so no card networks are involved in the process. Even though there may be other currencies involved aside from the Euro, SEPA DD payments are only processed in Euros, so currency exchanges are the responsibility of the banks.  

SEPA Direct Debit works very similarly to BACS (The UK bank transfer scheme) and other national networks, but it does have some unique points. Aside from the fact that all payments must be processed in Euros, SEPA also requires a BIC or IBAN for transfers (account numbers and sort codes aren’t enough) and has separate schemes for businesses and consumers.  


BACS is one of the most used payment schemes in the UK, owned and operated by Pay.UK, a leading retail payments authority that is also responsible for Faster Payments and cheques. Bacs is an electronic system that allows direct bank-to-bank transfers. Similarly to the other national and international payment networks mentioned here, card networks are not involved in this payment processing.  

There are two BACS variants: BACS Direct Debit and BACS Direct Credit. Companies in the UK widely use BACS Direct Debit, which is also considered one of the safest payment methods, as the Direct Debit Guarantee protects it.  

Direct Debit Guarantee  

All banks that accept instructions to pay Direct Debit payments are requested to have a Direct Debit Guarantee, which protects customers from fraudulent payments and gives them the right to cancel or amend their Direct Debit mandates whenever they wish to do so.  


Much like BACS serves the UK market for bank-to-bank transfers, ACH, or Automated Clearing House, does bank-to-bank transfers in the United States. It is managed by the National Automated Clearing House Association, also known as NACHA. ACH payments are either processed by the US Federal Reserve or The Clearing House, a private institution owned by the largest banks and financial corporations in the US.  

ACH is divided into ACH Credit and ACH Debit. ACH Credit represents funds pushed into an account, while ACH Debit represents funds pulled from an account. According to NACHA, ACH Direct Debit is used by most companies in the US, and 96% of American workers get paid this way. Payments may take more than three working days to reach an account, so it isn’t the fastest of payment types. However, it is very reliable and, as we have seen before, incredibly popular nationwide.  


BECS, or Bulk Electronic Clearing System, is an Australian payment network that processes bulk bank-to-bank transactions. It is managed by AusPayNet (Australian Payments Network, formerly APCA), a self-regulatory body composed of 120 members, including leading financial institutions in Australia. BECS functions under AusPayNet’s regulations and standards.  

Similarly to the other networks, BECS can be divided into BECS Debit or BECS Credit. It can also be used for one-off bank-to-bank transactions. Payments are processed and settled on the same day, but it may take up to three days to receive confirmation of a Direct Debit payment.  

Challenges in operating various DD Mandates 

Each direct debit network has different rules and operational procedures. This means that settlement timings can vary widely, and communications are equally not unified. Managing entire mandate lifecycles across several networks can quickly become an overwhelming task, yet it is necessary if you operate in more than one market. Equally, each network has its own success and failure codes, communication formats and processes. Managing each direct debit network individually requires in-house development of report readers for all networks, which is time-consuming, costly and requires expertise. This is where mandate management tools come in.  

Why use a mandate management tool?  

Mandate management tools like Imburse’s enable insurers to automate the entire process of the mandate lifecycle by allowing them to safely create, amend or cancel mandates online, all in one place. A mandate management tool will help you manage complete lifecycle of direct debit mandates but, it should do so across networks and providers, providing both a compliant, standardized and user-friendly way to manage every dd mandate, on every PSP, initiated by whichever agent (customer, bank or insurer). Imburse’s tool allows for easy management of mandates across networks; you can use this tool with any direct debit payment scheme or various schemes simultaneously, and efficiently handle all direct debit network communications and manage your customers’ mandates. 

How Imburse can help 

By connecting to Imburse, you can instantly access BACS, SEPA, and BECS, and easily create, register, amend and cancel mandates electronically. Our modern mandate management tool offers a single interface to manage entire mandate lifecycles, guaranteeing network and provider compliance and single format reporting, regardless of provider and network.  

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. Our team will be happy to show you all of  Imburse’s functionalities and offer you a free demo. 


Mariana Marques

Mariana is a content writer at Imburse, specialising in Finance and Technology topics.

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