Direct Debit UK

• Overview
• Countries & currencies
• Integration
• Process flows
• Testing
• Additional information
• Reporting

Additional information

License requirements

You need to be licensed by ‘the direct debit scheme’ in order to collect by direct debit in the UK. The license is given by the banks or building societies and can be obtained with or without the help of us. In case of the latter, the you have to indemnify the bank for any loses or claims related to the direct debit process. The bank will also require proof of your of financial soundness. We can indemnify the bank on your behalf. This gives small companies or companies that are not yet active on the UK market the possibility to collect payments through direct debit.

Local bank account requirements

You will be granted a separate account and an “Originator Identification Number” (OIN). If you are owning the license the account will have your name as beneficiary as well. We will have to be given the authority to operate the account on your behalf. All statements and reports will be sent to us and solely we will operate the account. If we indemnify the bank on your behalf, the account will be named: “GlobalCollect BV re <Merchant name>”. (GlobalCollect BV is the legal name). This name will be shown on the account statement of the consumer.

Administration of mandates

You need to register the mandates in your database. The original mandates are sent to the banks and building societies of the consumers. We do not register the mandates.

You are also required to register the ‘status’ of the direct debit, i.e.: the first direct debit, the nth Direct Debit, representation or final Direct Debit. In the file sent to us and forwarded to BACS this status is communicated.

Procedure:

The mandate, with the license number or Originator Identification Number printed on it, is sent to the consumers. The mandate has to be filled in by the consumer (the account number of the consumer) and signed. The mandate must be returned to your address. You need to update your database with the new direct debit consumer. The original mandate is forwarded to the bank or building society of the consumer. The banks use the mandate to verify whether a direct debit has been authorized by the account holder (Your customer).

Notification Requirements

The consumer should be notified of a direct debit at least10 days prior to the direct debit. This notification can be ‘eliminated’ by notifying the consumer before the first debit of the periodicity of the direct debit. If the amount of the direct debit changes, the consumer has to be notified.

Consumer Reversal Periods

In case debits have taken place without a signed mandate being in place the consumer will have the right to reverse all previous payments without any time limitations. In other cases the consumer has 5 calendar days to reverse the debit.

Indemnity claims

Paying banks (Bank of the consumer who was debited) will refund the Payer (The consumer) in case of an error by the originator (The merchant). The consumer for example can go to their bank and, for example, inform that the amount was debited from the account by mistake, without instruction, or on the wrong date.

Under the terms of the direct debit guarantee, the paying banks will accept the word of the Payer concerning an error made by an originator and will make an immediate refund of the amount collected. The paying bank uses the indemnity claim process to recover the refunded payment from the originator. This involves sending a completed indemnity claim form (example available through us) detailing the reason for the claim and the amount claimed.

Under the terms of their direct debit scheme membership, the originator must settle the claim within 14 working days, even if liability for the error is disputed.

A valid indemnity claim must meet one of the following criteria:

1. The amount and / or date of the direct debit differs from the advance notice issued to the payer by the originator.
2. No advance notice was received by the payer or the amount quoted is disputed by the payer.
3. Direct debit instruction (DDI) cancellation by the paying bank.
4. Where the payer has cancelled the DDI direct with the originator, notwithstanding the fact that the payer may not have cancelled the DDI with the bank.
5. No instruction held. Payer disputes having given authority.
6. Signature on DDI is fraudulent.
7. Originator name disputed. This is where the paying bank is unable to identify and consequently action a payer’s request to cancel a DDI as a result of the originator using one of the set-up exceptions in respect of trading names or facilities management.

NB: Where an originator has made an error which does not fall within the valid indemnity claim criteria, this will be referred to the direct debit scheme steering group, which will determine liability and give its authority for an indemnity claim to be raised.

If the originator disagrees as to the validity of the indemnity claim he has the right to make a counter claim under certain conditions. The indemnity claim should be settled anyway.

Procedure followed by Worldline:

The indemnity claim will be sent to the originator. In this case this will be us. Because we (and not you) owns the bank accounts involved, the claims should be sent directly to our bank. Our bank will take care that the amount will be debited from the account involved. We will then report the debited item to the merchant and will charge the merchant accordingly.

Collection schedule

Processing time of the collection file depends on the country of processing and the collection date delivered in the input file. If the collection date in the input file has passed, the file will be rejected. We require a period of one business day to process the file.

After the banks and building societies have received the mandates a period of 14 days is used to lodge the mandates. This means that only 14 days after the reception of the mandates by the banks the first direct debit can by processed.

Collection schedule for a first time transaction:

Collection schedule for a subsequent transactions:

Mandates report .mr1

The mandates report includes information about the mandates that have been processed. This information does not lead to an amount to be paid out; it is a confirmation of the receipt and submission of mandates as sent in by the customer:

• Direct debit mandates submitted for processing
• Direct debit mandates rejected
• Direct debit mandates assumed approved
• Direct debit mandates changed

MyCheckout hosted payment pages

Direct Debit UK can only be used using our REST API or JavaScript SDK. We do not yet offer mandates, therefore Direct Debit UK is not available on the MyCheckout Hosted Payment Pages.

References

Direct Debit UK is offered in a full service model. This means that we take care of the collection and reporting of the funds. Status changes that affect the financial position (like refunds and payments) will be reported in our standard reports, as described in the reporting section. 

Refunds on this payment product  are made via Bank Transfer (Payment Product ID 1015) and can be processed in two ways:

• Submitting a refund action on the order via API
• Pushing the refund button on the Payment Console

Please be aware that the total value of the refunds submitted on the order may not exceed the total amount paid on the payment. The maximum timeline for processing a refund is 180 days.