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Last edited Aug 2024 — 2 min read
Before you can collect payment by Direct Debit, your customer must issue you with a mandate. This mandate is called a "Direct Debit Instruction", or DDI, although it is commonly referred to as a "Direct Debit Mandate".
This guide will walk you through the rules around setting up and managing Direct Debit Mandates or Instructions. You may also want to read our guides to getting access to Direct Debit and taking payments or download our Direct Debit mandate template.
A Direct Debit Instruction is an authorisation from your customer to collect future payments.
The details of each authorisation are standardised:
In many cases, your customer will have a specific schedule of payments in mind, such as a fixed subscription, when they authorise a DDI to you. The notification requirements of a DDI and the Direct Debit Guarantee help protect them from any other payments taken in error or fraudulently.
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A Direct Debit can be set up via secure online banking, over the phone or through a paper Direct Debit Instruction form like this one. To set up a Direct Debit, you will need to provide your name, bank name, sort code and account number. A Direct Debit can take up to 10 days to be activated and you should receive a confirmation letter or email.
The layout and content of paper Direct Debit Instruction forms are strictly controlled by the Direct Debit scheme rules. The Service User Guide provides full details of these requirements, and is available from your bank. You can also see an example mandate form.
Once a paper mandate form has been completed and returned to you, its details need to be submitted to the banks (see the next section). The paper mandate form should be retained as proof that your customer has authorised a Direct Debit.
To save you the work, we've made a template Direct Debit mandate for you to complete. This template should be a good starting place for you, however, you will need to get the form approved by your sponsor bank before using it. We suggest working closely with your sponsor bank to ensure that your Direct Debit mandate form complies with the Direct Debit scheme requirements.
Telephone and online Direct Debits are known as "Paperless Direct Debits". Creating Direct Debit Instructions in this way requires special approval from your bank, who need to sign off on all information presented to your customers.
Once payment information and approval have been collected from your customer it must be submitted to the banks electronically (see next section). There is no physical copy of the mandate to retain, which can make proving authorisation harder if it is later disputed.
Once your customer has completed a Direct Debit Instruction, it needs to be submitted to the banks. This informs your customer's bank of the DDI, and allows you to collect payments against it in future.
Submissions to the banking system are made through Bacs , the clearing service for Direct Debit. You must create a file containing details of each DDI and transfer it to Bacs. More details on the submission process are available here .
Once submitted to the banks, the Direct Debit Instruction will be active within a couple of working days (see Timings ). Once active you can start taking payments against it.
If anything goes wrong during the DDI setup process, you'll be alerted by a message from Bacs (see the AUDDIS section in Messages from the Banks ).
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Once a Direct Debit Instruction is set up, you can cancel it by submitting a cancellation message to the banks. Your customer can also cancel it through their bank.
You will receive a message from Bacs whenever there are changes to your Direct Debit mandates (for example, if a payer cancels their Direct Debit mandate). For full details on how these messages are received, and their meanings, see the ADDACS section of Messages from the Banks .
GoCardless provides an optimised flow for your customers to create new DDIs online:
