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What Is Mandate Management?

March 18, 2024

It is essential for merchants to manage customers’ direct debit mandates and keep track of all contracts and recurring payments from customers on a daily basis. A mandate represents an agreement or approval from customers by which they accept to have one-off or recurring transactions 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 This approval must be managed, updated, and stored safely, even when contracts are no longer active.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 Duck Creek Payments can help you optimize your direct debit mandate management operations.

What Is a Payment Mandate?

A mandate is an agreement or “instruction” in which the payer authorizes the payee to debit payment(s) from their account. In direct debits, for instance, the customer agrees to let the merchant pull funds 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 funds from customers automatically.

Nevertheless, much work is involved in setting up, amending, storing, and canceling mandates. Insurers 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, merchants have quite a few responsibilities behind the scenes. These responsibilities depend on where your business is based. SEPA Direct Debits – enabled for – 36 – countries and territories that are part of the SEPA region – require paper mandates or 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.

Merchant’s Responsibilities in Managing Mandates

Generally, merchants are responsible for dealing with mandates’ storage, amendment, and cancellation. 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.

When Can Mandates Be Cancelled?

Either merchant or customer can amend a mandate, including changing dates, mandate information, or cancellation.

Mandates can be canceled 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. If the customer has canceled the mandate, then the merchant should not submit a DD request against a canceled mandate regardless of whether there are any scheduled/pending payments against that DD mandate or not – the merchant should figure out other means of collecting those payments.

Merchants are also responsible for storing the cancellation of contracts/mandates. SEPA Direct Debit mandates must be canceled 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 cancellations. 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-states, most of which use the Euro as their currency. The full list of member-states is Austria, Andorra, Belgium, Bulgaria, Cyprus, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Republic of Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Slovenia, Slovakia, Spain, Sweden, Switzerland, United Kingdom and Vatican City State.

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 Direct Debit 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.

Our previous article explains SEPA bank transfers in greater detail.


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. To define bacs further, it is an electronic system that allows direct bank-to-bank transfers. Similar to the other national and international payment networks mentioned here, card networks are not involved in this payment processing. Our previous article explains BACS payments further. 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.

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.


As with the UK using the BACS scheme to process bank-to-bank transfers, Australia uses its very own payment scheme called BECS (Bulk Electronic Clearing System). It is managed by AusPayNet (Australian Payments Network, formerly APCA), a self-regulatory body composed of 120 members that include leading financial institutions in Australia.

Similar 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.

To know more about BECS payments, have a look at our previous article.

Automated Clearing House

Much like BACS serves the UK market for bank-to-bank transfers, Automated Clearing House (ACH) 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.

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.

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 Duck Creek Payments 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 the 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).

Duck Creek Payments allows for easy management of mandates across networks; you can use this tool with any direct debit payment scheme or various schemes simultaneously, efficiently handle all direct debit network communications, and manage your customers’ mandates.

How Duck Creek Payments Can Help

By connecting to Duck Creek Payments, 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.  

Duck Creek Payments 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, but our marketplace is packed with all the payment tools you need to fully optimize your payment 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 Duck Creek Payments’ functionalities and offer you a free demo.

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Bruno Soares
Senior Product Director
Bruno Soares is Senior Product Director Duck Creek Technologies, renowned for his passion for the impossible and his ability to build high-performing teams. In his two-decade entrepreneurial journey, Bruno has made a mark in Digital Banking and Payments, e-commerce, Interactive Television, and Aeronautics industries, through hands-on product management. Bruno’s commitment to innovation and talent development is evident in his track record of building teams that excel in tackling challenges. As one of the former Executive Leaders of Imburse AG, an award-winning SaaS Payments middleware for Enterprise, Bruno orchestrated a successful exit via a strategic sale to Duck Creek Technologies, where he continues to bring a wealth of experience and a relentless pursuit of excellence.