A payment mandate is a recorded authorisation from a payer that allows a named merchant to collect payments from their account or card automatically, within agreed limits. It is the basis for features sometimes branded AutoPay, standing instructions or direct debit.
Why it matters
Subscriptions, utility bills, loan instalments and insurance premiums are collected repeatedly, and asking for approval every time would cause missed payments. A mandate captures consent once, usually including the maximum amount, frequency and validity period. Rules differ widely. In India, e-mandates through card networks and UPI AutoPay exist under RBI frameworks that may require advance notification and extra approval above certain amounts. Europe's SEPA Direct Debit uses mandates signed by the debtor, and the US ACH uses authorisation forms.
Example
Merchant: Example Streaming
Max amount: 500 per debit
Frequency: Monthly
Valid: 12 months
Status: Active (customer can pause or revoke)Each month the merchant sends a debit request within these limits. The payer's bank checks it against the mandate and can reject anything outside it.
Common mistakes
- Debiting above the mandate's limits or on unagreed dates.
- Making it hard to cancel. Many jurisdictions require easy revocation.
- Skipping pre-debit notifications where the rules call for them.
Rules vary by country; this entry is a definition only, not legal advice.
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