Direct Debit

What it is

A Direct Debit is a financial transaction in which one entity withdraws funds from another’s bank account by means of an automatic authorisation. Through Direct Debit, only payments from (IBAN) private banking can be processed, as a one-off or as a recurrent withdrawal. SOFORT Banking and iDEAL are supported as Direct Debit payment methods.

This payment method gives you the possibility to collect funds from your customer bank account on a recurring basis. SEPA Direct Debit is a standard across Europe to collect funds from your customers by means of previous authorization.

Customers can withdraw this payment for 56 days, without giving a reason or you having a possibility to appeal.

How it works

As the merchant files the Direct Debit request, an order with status initialized will be created (after MultiSafepay has conducted a background check on the provided customer data).

Every night, all Direct Debits will be sent to our bank and the status will change to uncleared. From this moment on, it is no longer possible to cancel the transaction.

The next business day, we will receive the first feedback from our bank in case of a wrong IBAN or BIC. When the money is received on our end, the order status changes to completed, but the transaction status remains uncleared. The number of days that a Direct Debit has a transaction status uncleared depends on the transaction amount.

Pre-notification

According to European law, merchants who use recurring payments should inform their customers about any charges being made. This can be done by email, but it is sufficient to include this in your General Terms & Conditions provided the customer has explicitly agreed to those Terms & Conditions.

Using iDEAL as an Initial payment method

  1. The customer selects iDEAL as a payment method on the merchant website
  2. The customer submits a payment
  3. If the payment was successful, you will receive a recurring payment ID in the transaction details which can be used for recurring payments
  4. When creating a recurring payment, you are obligated to use the Direct Debit gateway, since this is the payment method used to follow up on the initial iDEAL payment.

Using SOFORT Banking as an Initial payment method

  1. The customer selects SOFORT Banking as a payment method on the merchant website
  2. The customer manually creates a payment from their bank environment
  3. If the payment was successful you will receive a recurring payment ID in the transaction details which can be used for recurring payments. The recurring payment ID will only be available after the funds have actually been received. This can take up to 3 business days
  4. When creating a recurring payment, you are obligated to use the Direct Debit gateway, since this is the payment method used to follow up on the initial SOFORT Banking payment.

Clearing

For amounts smaller than 500 euro, clearing will take 7 business days.

Fpr amounts larger than 500 euro, clearing will take 20 business days.

Transaction flow

The transaction flow shows the different ways a transaction can be processed. This differs per payment method.

  • Order status
    The order status indicates the status of the order, such as completed, pending or rejected. The order status is independent of the incoming or outgoing payment of the transaction.

  • Transaction status
    The transaction status indicates the payment status of the transaction, such as completed, pending or rejected. Once the transaction status is completed, the amount of the transaction is added to your MultiSafepay balance.

Order Status Transaction Status Description
Initialized Initialized Created but not yet processed by the bank.
Uncleared Uncleared Processed by the bank waiting for clearing period (depending on amount and settings of the merchant).
Completed Completed Payment has been received and the funds will be added to your MultiSafepay Control balance.
Declined Declined Rejected during uncleared period.
Cancelled Cancelled Transaction has been cancelled or incorrectly entered by webshop.

Refund flow

Order Status Transaction Status Description
Reserved Reserved A refund has been requested.
Completed Completed Refund has been successfully processed.

Direct Debit Chargeback

Order Status Transaction Status Description
Completed Completed Forced reversal of funds initiated by customer’s bank (issuer). The chargeback cannot be challenged.

The full API reference for Direct Debit can be found here

E-mandate

MultiSafepay creates an e-mandate automatically, based on IBAN and SiteID. A Direct Debit can be First or Recurrent. Two different batches are made for this. The First orders are processed after 5 days by the bank, while the Recurrent orders after 2 days.

Chargebacks by customer

A Direct Debit payment is not fully guaranteed. The customer has 56 days to retrieve the payment that took place. However, when it is an unauthorized transaction (i.e. without verifiable debtor consent) it can even be 13 months. As this process involves staff intervention in both the Debtor Bank and the Creditor Bank the costs can be as high as 65 EUR.

Product rules

Some rules may apply to certain payment methods. For Direct Debit, the following rules apply:

  • Refunding more than the stated amount of the original transaction is not possible with Direct Debit. More information is available on our refund more than original amount page

  • Successful Direct Debit transactions have no expiring date regarding refunding, as long as the receiving bank is able to process the refund

  • As a collection payment method, Direct Debit has a different payment flow and the setting of days or seconds active will have no influence. Full documentation can be found on our lifetime of a payment link FAQ page

  • Payments done through Direct Debit are processed in Euros (EUR).

Activate

As Direct Debit poses certain risks, you will need to first apply before you can process this kind of transactions.

Please contact your account manager to submit your request to use Direct Debit.

Please note, Direct Debit is not suitable for normal retail (e.g. clothing) because the payment can take up to 10 days for completion. Besides, a Direct Debit payment can be cancelled by the customer within 8 weeks without reason. There is no right to appeal.

Request refund

Please follow these steps to refund a Direct Debit transaction:

  1. Login into your MultiSafepay Control
  2. Select Transactions -> Transaction overview
  3. Find the transaction through search
  4. Open the transaction
  5. Select refund
  6. Fill in the amount that you are going to refund to the customer
  7. Confirm the refund.
  • The transaction status is now initialized. As long as the transaction status is marked as initialized, the refund can be cancelled. When the transaction status is marked as completed, the refund is processed correctly. The customer will receive the refund to the bank account number in which the transaction was originally paid to, within the next business day

A refund will only be processed if your balance on your MultiSafepay Control is sufficient.