Overview
Scheme | SEPA | BACS |
---|---|---|
Region | Eurozone | UK |
Currencies | EUR | GBP |
Refunds | Supported | Supported |
Disputes | Supported – | Supported – |
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.
Direct debit payment flow
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 toFAILED
. - 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 toEXPIRED
.
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.
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.
Scheme | SEPA | BACs |
---|---|---|
Payment CREATED | D+0 | D+0 |
User email notification | D+0 |
|
Payment SUCCEEDED | D+5 |
|
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).
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
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.
Related resources
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