Collecting money from a customer’s bank account
Three tabs under Payments deal with money pulled from a customer’s bank. They look alike and do different jobs. Confusing them is the usual reason a collection cannot be explained.
This article is the depth behind those three tabs. For the whole Payments group, see payments on an account.
The three, side by side
| Tab | What it holds | Who creates it | What it does on its own |
|---|---|---|---|
| Collection Authorities | The customer’s permission to collect at all | Someone requests it; the payer’s bank answers | Nothing moves money. It permits or blocks everything that does |
| Debit Orders | A repeating arrangement to collect a set amount | You, on the tab | Produces one collection each time its schedule falls due |
| Direct Debits | One individual collection | The platform, when something falls due | Goes out to the clearing scheme, then settles or comes back |
Read it as permission, then intention, then attempt.
flowchart TD
A["Collection authority<br/>the payer's permission"] --> B{"Does it permit<br/>this collection?"}
C["Debit order<br/>a repeating arrangement"] --> B
D["Instalment schedule<br/>on a collecting account"] --> B
B -- "Yes" --> E["Direct debit<br/>one collection"]
B -- "No" --> F["Nothing goes out,<br/>and the day is recorded"]
E --> G["Settled"]
E --> H["Returned unpaid"]Two things feed a collection, not one. A debit order is the arrangement you set up by hand. An account that collects its instalments does so straight off its own schedule, with no debit order row at all — see the repayment schedule.
What a collection authority is
A collection authority is the payer’s mandate for a named creditor to collect one agreement’s instalments from one named bank account. Banks call it a mandate, and the tab shows the scheme’s reference for it once there is one.
The mandate belongs to the agreement, not to the person. The paying bank account, the payer, and the creditor are recorded on it. That is what lets Jordan pay Alex’s loan: the payer is an attribute of the mandate, not what identifies it.
One live mandate governs one agreement on one collection scheme. Requesting a second while one is live is refused.
The terms the payer agrees to
| Term | What it means |
|---|---|
| Amount | Either a fixed amount, or a ceiling the collection may not exceed |
| Frequency | How often collection is expected |
| First collection date | The earliest date the mandate covers |
| Tracking days | How long the scheme may keep trying after the due date |
The ceiling is the term the platform enforces. A collection above it does not go out, and one already raised is refused before it is sent.
Leave the amount blank and the ceiling defaults to the highest instalment in the account’s schedule. An escalating loan whose mandate was pegged to the opening instalment would breach its own mandate partway through the term.
Alex’s loan runs three monthly instalments of 2,000.00, 2,200.00 and 2,420.00, in the account’s currency. Requested with no stated amount, the mandate reads up to 2,420.00 — the highest row, so no instalment in the term breaches it.
What each state means
| State | What it means | Can you collect? |
|---|---|---|
| Requested | Captured, not yet sent to the payer’s bank | No |
| Authentication Pending | With the payer’s bank, waiting for an answer | No |
| Authenticated | The payer’s bank holds proof of it | Yes |
| Registered | Lodged but unconfirmed | Yes, but every collection is disputable |
| Declined | The payer’s bank refused it | No |
| Cancelled | Withdrawn | No |
| Disputed | A collection under it came back as unauthorised | No |
The difference between Authenticated and Registered is dispute protection, not speed. Under an authenticated mandate the payer’s bank can be shown the proof. Under a registered one the customer can dispute any collection, and it will succeed.
Where each action lives
- Request a mandate from the payer’s bank account page. The mandate is granted by a payer over an account they bank with, so that is where you ask for it.
- Record the answer — authenticated, registered, or declined — from the Collection Authorities tab on the account or the counterparty.
- Amend or Cancel from the same tab.
There is no live connection to the collection scheme yet. Every answer from the payer’s bank is recorded by a person, from what the bank told them.
The mandate lifecycle follows South Africa’s authenticated-collection scheme rules.
See the standards register row for
PASA / DebiCheck authenticated collections (South Africa) — mandate lifecycle.
Which accounts need one
A mandate is only required where the collection scheme authenticates mandates. Your organisation decides which of its collection rails do. On the ones that do:
- An account that collects over that scheme cannot be activated without a live mandate. Requested is enough to activate, so a signed agreement is not stranded while the bank authenticates.
- Collecting needs more than that. The mandate must be authenticated or registered.
Your organisation can also permit collecting with no mandate at all on a given scheme. That is a deliberate trade: the instalment is collected rather than missed, and every such collection is fully disputable.
What a debit order is
A debit order is a repeating arrangement you set up on the account. Select Schedule on the Debit Orders tab and give it three things: an amount, a schedule, and the bank account to collect from.
The schedule must use a business-day convention, so a collection never falls on a day the banks are shut. See business day conventions.
Your organisation sets a minimum collection amount for each currency. A debit order below it is refused when you save it.
Where the minimum is 50.00, a debit order for 10.00 is refused and the reason names the minimum.
What the tab lists
One row per arrangement, with the schedule in words, the amount, the bank account it collects from, and the next date it is due. An arrangement that is no longer active shows its state instead of the actions menu.
While it is active you can change the amount, reschedule it, point it at a different bank account, or cancel it.
When each collection is raised
A collection is raised before the day it clears, not on it. The scheme needs warning, so the platform works backwards from the clearing date and raises the collection on the right day for that lead.
A monthly debit order of 500.00 due on 15 January is raised on 12 January and clears on 15 January. The tab then shows 15 February as the next due date.
The account is credited on the clearing date, not the raise date. See value dating.
What a direct debit is
A direct debit is one collection: one amount, one date, one attempt. The Direct Debits tab is the record of every attempt on this account.
| Column | What it tells you |
|---|---|
| Trading Date | The day the collection was raised |
| Settlement Date | The day it clears |
| External Account | The customer’s bank account it collects from |
| Amount | What is being collected |
| Trace Number | The reference it went out under, once sent |
| Status | How far it got |
A collection waiting for a decision offers Approve and Reject on its row.
| Status | What happened |
|---|---|
| Requested | Raised, waiting for a decision |
| Approved | Cleared to go, not yet sent |
| Rejected | Someone stopped it before it went |
| Submitted | Sent to the clearing scheme |
| Returned | It came back unpaid. The status names the reason |
The mandate is checked twice: once when the collection is raised, and again just before it is sent. The second check matters because a mandate can be cancelled or amended in between.
Sam’s mandate is amended down to a fixed 500.00 after a larger collection was already approved. Sending it is refused, and the refusal names the 500.00 ceiling.
What the mandate tab shows about collections
The Collection Authorities tab counts the collections that went out under each mandate, with the latest amount and date.
Three collections of 900.00, 1,000.00 and 1,100.00 under a mandate with a 1,500.00 ceiling read as 3 collected, showing 1,100.00 as the latest. None breaches the ceiling.
A mandate later amended below a collection that already went out is flagged over ceiling. The collection is history; the breach is worth seeing.
When a collection does not go out
A collection that never leaves is invisible unless someone says so. A quiet loan looks exactly like a delinquent customer, and the two need opposite actions.
So the day a collection does not go out is recorded on the account, with the reason. The Collection Authorities tab shows the count and the latest reason, and the Blocked Collections page lists every account in that state.
| Reason | What to do |
|---|---|
| The account names no bank account to collect from | Nominate one on the account |
| The payer has granted no mandate | Request one from the payer’s bank account page |
| The mandate does not permit collection | Chase the answer from the payer’s bank |
| The instalment is above the mandate’s ceiling | Amend the mandate |
| The customer is held | Nothing is presented while the hold runs |
A hold does not cancel the mandate. Collection resumes when the hold is lifted. See hold.
The first two reasons are ordinary onboarding failures, and they are the most common. A customer who never completed the authentication at their bank fails the first collection and then goes quiet. See chasing arrears.
When a collection comes back
A collection can settle and still be reversed later. The clearing schemes allow a window, and an unpaid return arrives inside it.
| Reason it came back | What it means |
|---|---|
| Insufficient funds | The money was not there |
| Account closed | The customer’s bank account no longer exists |
| Invalid account | The account details are wrong |
| Not authorised | The payer’s bank says no mandate covers this collection |
Whatever the reason, the collection is reversed on the account.
The reversal is dated at the original collection’s value date, not the day the return arrived. So interest on a balance that never really cleared is corrected, rather than left overstated for the days in between. Both entries show on the transaction list — see reading the transaction list.
A not-authorised return is different
If a collection under an authenticated mandate comes back as not authorised, the two facts contradict each other. The payer’s bank confirmed the mandate, then said it does not cover the collection. The mandate is marked Disputed and stops collecting until someone investigates.
Under a Registered mandate, the same return is absorbed normally and the mandate keeps its state. That stream is disputable by design, so the return is expected behaviour rather than a contradiction.
Returns are not yet fed in from the clearing scheme. Like authentication answers, they are recorded from what the bank reports.
How a customer’s instruction to stop is recorded
A customer can ask you to stop two different things, and the difference matters.
| They say | You do | Effect |
|---|---|---|
| “Stop this monthly payment” | Cancel the debit order | The arrangement ends. No further collections are raised from it |
| “I withdraw my permission” | Cancel the mandate | Nothing collects on that agreement at all, from any source |
Cancelling the mandate also stops collections already in flight. An approved collection that has not been sent is refused when it is sent, naming the missing permission. That matters: without it, a payer who withdrew permission on Monday would still be collected from on Tuesday.
Both cancellations are recorded with the reason and the person who did it, so the trail says why collection stopped.
Changes that need the payer’s bank to agree again
Some changes mean the payer’s bank no longer holds proof of what you are collecting. The mandate then goes back to Authentication Pending — but the previously proven terms stay collectable meanwhile, so nothing stalls while the bank answers.
- The paying bank account is changed, or its account number changes.
- A term the payer authenticated is changed — typically the payment schedule or the collection account.
Which changes count is your organisation’s configuration. It marks the inputs on each operation that a payer authenticated, so re-authentication follows the terms the payer actually agreed to, rather than every edit.
An amendment works the same way. The new terms are parked and shown as Awaiting Re-authentication, and the old ones remain what collections go out under until the bank proves the new ones.
When a tab is not there
Each of these three capabilities is licensed separately, and a tab you do not license does not appear. A product also names which tabs its accounts carry, so a deposit that is never collected on shows no debit order.
The Collection Authorities tab is the exception. It also appears when one of your collection rails authenticates mandates, licensed or not — otherwise the account would refuse to activate for a reason with no screen behind it. See switching features on and off.
Related: paying money in, how a repayment is recorded, how a payment picks its rail, choosing which account money moves through.