SEPA mandate: without one, the debit cannot be defended
It is kept by the creditor, not by the bank. And the day someone returns a debit claiming they never authorised it, that piece of paper is the only evidence there is.
The authorisation signed by the debtor allowing the creditor to raise debits against their account and their bank to honour them.
What it has to contain
- Identification of the creditor and their SEPA identifier.
- The mandate's unique reference, which then travels with every debit.
- The debtor's name and address and their IBAN.
- Type of payment: recurring or one-off.
- Place, date and signature.
- The legal wording setting out the right to a refund.
The creditor identifier
In Spain it is made up of ES, two check digits, three characters of business code — ZZZ by default — and the NIF. Sixteen characters in all. The business code lets you separate collection streams within the same organisation and plays no part in working out the check digits.
It expires
If 36 months go by without using it since the last debit, the mandate stops being valid and the creditor has to cancel it. Collecting again requires a new mandate. It is the classic case of the member who effectively left and whom, three years later, someone tries to debit.
An example of why it matters
A club with 210 members on direct debit and 18 mandates with no signature on file. If one of those 18 returns a debit of €145 as “unauthorised” within the thirteen months, the club cannot produce the mandate and the charge is reversed without argument. Multiplied by the 18, that is €2,610 backed by nothing at all.
The mistake that comes up most
Changing a member's IBAN in the software without updating the mandate or asking for a new one. The mandate reference and the account go together: changing one without the other produces debits that the debtor's bank can reject for inconsistent data.
Where this carries on in Cairos: Membership fees and mandates in a club.
Terms that go with this one
Almost no tax concept makes sense on its own. These three are the ones that most often turn up beside it.
Direct debit
The collection order the creditor presents to their bank so that the amount leaves the debtor's account, backed by a mandate the debtor has signed.
Payments and bankingSEPA
The single euro payments area, in which transfers and direct debits work under the same rules in every country that belongs to it.
Payments and bankingDirect debit batch
The set of debits or payment orders sent to the bank in one go, in a file in a standard format.
This, handled without thinking about it
Cairos keeps the invoices, the record books and Hacienda's forms from the same data, so the theory on this page turns into boxes that are already filled in.
No card and no minimum term.