SchemeSEPABACS
Region

Eurozone

UK

Currencies

EUR

GBP

Refunds

Supported

Supported

Disputes

Supported –
Non-contestable

Supported –
Non-contestable

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Introduction

Direct debit is a way of processing payments by pulling funds from the end user’s bank account directly to a .

In order to process direct debits, Mangopay relies on a mandate, which is an agreement from the end user allowing a third party to collect the payment in the future.

This payment method is particularly popular for subscriptions for instance.

The following schemes are supported:

BACS

Scheme specific to the UK, which only supports GBP pay-ins. A GB-type Bank Account is required to create this mandate.

SEPA

Scheme specific to the Eurozone, which only supports EUR. An IBAN-type Bank Account is required to create this mandate.

Note - Payment method activation

Mandates and direct debit pay-ins are only available for certain business types and are not activated by default.

Please contact Mangopay’s Support team via the Hub to activate this payment method.

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Direct debit payment flow

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Process

Processing direct debit pay-ins requires three steps:

  • Create a Bank Account object belonging either to the BACS network (GB-type Bank Account) or SEPA network (IBAN-type Bank Account).
  • Create the Mandate object and have the end user confirm it.
  • Make a Direct Debit PayIn once the mandate is active.

As agreed with the end user, until the mandate is either:

  • Canceled - The end user or the platform has canceled the mandate. This results in the Status of the Mandate object being set to FAILED.
  • Expired - No pay-ins were made against the mandate in the last 24 months, which makes it expire. This results in the Status of the Mandate object being set to EXPIRED.

Note - Mandate activation

Once the end user confirms the mandate, its Status changes to SUBMITTED, meaning that it has been submitted to the end user’s bank. It will become ACTIVE:

  • After a few days (usually 3) for the BACS scheme.
  • After the first direct debit pay-in for the SEPA scheme.

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Pay-in processing time

Direct debit pay-ins are not instantaneous, there will always be a delay between the moment the transaction is CREATED until it reaches the SUCCEEDED status.

While such delays can vary, you can find in the table below the usual number of business days to reach each step of the pay-in process.

SchemeSEPABACs
Payment CREATEDD+0D+0
User email notificationD+0
  • D+1 (first payment against the mandate)
  • D+0 (subsequent payments against the mandate)
Payment SUCCEEDEDD+5
  • D+6 (first payment against the mandate)
  • D+5 (subsequent payments against the mandate)

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BACS scheme specificities

When using a BACS scheme mandate, please note that:

  • Confirmation pages and emails are only available in English, regardless of the Culture parameter value.
  • When the mandate is confirmed, an email is automatically sent by Mangopay on the platform’s behalf.
  • NatWest, RBS, HSBC, Metro, and Nationwide banks don’t show the platform trading name on bank statements; only Mangopay is displayed.
  • Mandates can’t be created on accounts where multiple signatures are required (e.g. business accounts).

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Late failures and chargebacks

Late failures can occur for direct debit due to the payment method flow: even if the direct debit pay-in was successful, the can pull back the funds.

When a late failure happens, Mangopay automatically creates a Dispute object (as well as the corresponding Repudiation transaction) in the same way as for a regular .

The Dispute DisputeReasonType parameter displays one of the late failure-related reasons:

  • LATE_FAILURE_BANKACCOUNT_CLOSED
  • LATE_FAILURE_BANKACCOUNT_INCOMPATIBLE
  • LATE_FAILURE_BANKACCOUNT_INCORRECT
  • LATE_FAILURE_CONTACT_USER
  • LATE_FAILURE_INSUFFICIENT_FUNDS
Learn more about disputes management

Note - It is not possible to cumulate disputes and refunds

If a Refund was made on for the direct debit pay-in, no Dispute can be created for the pay-in as it was already refunded.
In the same way, if a Dispute has already been created for a direct debit pay-in, no Refund can be created.

Usually, late failures occur:

  • Within 2 or 3 days for the BACS scheme.
  • Within 5 days for the SEPA scheme

Chargebacks are always non-contestable and are still possible:

  • Indefinitely for the BACS scheme.
  • Up to 8 weeks for the SEPA scheme.

Best practice - Make sure you wait prior to doing a refund

To avoid conflicts between a refund and a chargeback, we recommend waiting at least 8 business days following a successful transaction prior to processing a refund.

How to

Learn how to process a SEPA direct debit payment

Endpoint

The Direct Debit PayIn object

Testing

Learn about testing SEPA Direct Debit

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