Direct Debit Origination

What is Direct Debit?

Direct debit is a popular form of payment where the customer gives you their bank account details along with permission to debit funds directly from his/her account.

The rules that govern direct debit vary from country to country. Depending on where the customer lives and the type of permission given, direct debit can be used to pay an invoiced amount, to pre-pay an order or to arrange recurring payments. 

The Advantages

• Ensures timely payment
• Reduces administrative costs associated with payment reminders and follow-up
• Convenient for customers
• Reduce customer attrition and increase renewals through monthly payment programs

The Process

Receiving account information from your customers

You collect bank account information from your customers by fax, mail, telephone or Internet, and then submit that information to a bank or payment processor, who collects the payment on your behalf.

To offer direct debit in most countries, it is necessary to print a direct debit permission, or mandate, and include it with your order form or invoice. Depending on the country, there may be strict rules about the wording and layout of the mandate. PacNet will provide you with all the details you need.

On the mandate, there will be space for your customers to fill in their name, account details and the amount. Customers will complete these fields and send the information to your company, where it will be captured by your order processing staff.

Submitting debit payments to PacNet

Direct debit information can be securely submitted to PacNet via Raven Online. We process each batch of payments in the appropriate currency through our worldwide network of accounts. We report back to you promptly with notification of inaccurate account information or rejected payments. Full processing of a batch of direct debit transactions takes between 12 hours and 3 days depending on the country.

Funds are available to you one to five business days later (depending on the country) by wire transfer to your company’s designated bank account.

Keeping records

As with credit card vouchers, it is necessary to keep the direct debit mandates on hand in case your customer’s bank would ever like to question a transaction. The period of time you must keep the mandate varies from country to country but is never longer than two years.

Handling Chargebacks

To guard against the risk of direct debit transactions being charged back by your customer’s bank at a time when there is not sufficient payment volume with which to offset the charges, PacNet will maintain a rolling security reserve by transferring a small percentage for each net direct debit payment to a company designated holdback account for a period of 90 days.

Set-Up and Fees

To establish direct debit processing accounts through PacNet, there is a one-time per country set-up fee. This fee is determined by banking costs in the relevant country and will be quoted upon review of your application. 

PacNet’s direct debit processing service is charged on a percentage commission basis. Our commission is based on the currency, volume and value of the transactions processed.  We do not charge extra for wire transfers to your company’s designated bank account for foreign exchange services. 

Depending on the currency, you may begin processing direct debit transactions in one to twelve days after returning your signed Agreement for Direct Debit Processing to PacNet.

For further information about offering direct debit as a payment option, please call or email today. We will be pleased to advise you as to whether or not direct debit is appropriate for your international campaigns.