Direct Debit

Paystack Direct Debit is a payment arrangement that empowers customers to authorise merchants to withdraw funds directly from their bank accounts. This functionality offers a convenient alternative to card-based recurring transactions for Nigerian businesses.

Traditionally, the adoption of Direct Debit in Nigeria faced challenges. The manual mandate creation process involved customers filling out paper forms and awaiting bank approval, which lengthened and complicated the process.

Our approach transforms Direct Debit by streamlining and automating the mandate creation and approval process. This approach leverages bank transfers for user authentication, eliminating the cumbersome paper-based manual process.

Benefits

Financial Inclusion and convenience: Direct Debit promotes financial inclusion by allowing users without cards to authorize recurring payments directly from their bank accounts, making it more accessible and convenient.

Lower transaction cost: Direct Debit reduces business transaction costs by offering lower fees than card-based transactions, providing a cost-effective solution for handling a large volume of recurring payments.

Increased success rates: Account-based direct debits enhance success rates by minimizing failures related to card processing errors, ensuring a smoother and more reliable payment experience.

No payment disruption due to card expiry: Unlike card-based payments, Direct Debit eliminates the risk of payment disruption caused by expired or lost cards, ensuring a more stable payment experience for merchants and customers.

How it works

Customers initiate the process by creating a mandate on their account, signalling their consent for future direct debits. The customer will transfer a specified amount to a designated bank account to authenticate the mandate. The mandate undergoes automatic approval by the bank, streamlining the process for both customers and businesses.

With the mandate in place, the customer authorizes the merchant to debit their account for services using the created Paystack mandate, while Paystack generates a unique authorisation code as proof of debit authorization from the customer via a webhook notification. The merchant can then go on to use this authorisation code for future debits on the customer’s account.

Kindly note that you will have to wait for six hours after authorisation is completed before you can charge the customer’s account for the first time.

Direct Debit guide and API

Direct Debit is currently only available via the API. You can learn more about this process and access our Direct Debit API by visiting our Developer Documentation here.

Supported banks

• Access Bank
• Citibank Nigeria
• Ecobank Nigeria
• Fidelity Bank
• First Bank of Nigeria
• First City Monument Bank
• Globus Bank
• Guaranty Trust Bank
• Heritage Bank
• Jaiz Bank
• Keystone Bank
• Polaris Bank
• Premium Trust Bank
• Providus Bank
• Stanbic IBTC Bank
• Standard Chartered Bank
• Sterling Bank
• Suntrust Bank
• Titan Bank
• Union Bank of Nigeria
• United Bank For Africa
• Unity Bank
• Wema Bank
• Zenith Bank

Pricing

Please refer to our transactions pricing page here.

Initiating a Direct Debit as a customer

If you don’t have an existing mandate

1. On a Paystack merchant’s mobile or web app, you can link your bank account and approve future debits via direct debit. It could be a ‘link account’ button on the page.
2. Once you begin the process, we’ll check to see if you have an existing Direct Debit mandate with Paystack. If you do not, we’ll require you to fill in a mobile number so we can send an OTP (One-Time Password) to confirm your request.
3.  Click ‘Next’ to input the OTP and confirm your request.
4. After confirming your request with an OTP, you’ll be required to enter the bank account details you’d like to link and your residential address.
5. Click ‘Next’ to save the information and initiate a bank transfer to the account details we will provide. Kindly ensure you make the transfer from the account you want to link. After making the transfer, click ‘I have made the transfer’.
6. Once your transfer is confirmed, you will be asked to authorize the merchant to charge your account. Do this by clicking the ‘Authorise’ button. You will receive a success message once the process is completed.

If you have an existing mandate

1. On a Paystack merchant’s mobile or web app, you can link your bank account and approve future debits via direct debit. It could be a ‘link account’ button on the page.
2. Once you begin the process, we’ll check to see if you have an existing Direct Debit mandate with Paystack. If you do, we’ll send an OTP to the phone number tied to your existing mandate.
3. After inputting the OTP, we’ll show you the bank accounts you’ve previously linked. You can pick one of the accounts or choose to link a new one. Linking a new account will take you through the process outlined above.
4. After selecting a bank account from the list, you will be asked to authorize the new merchant to charge your account. Do this by clicking the ‘Authorise’ button. You will receive a success message once the process is completed.

We also made a short video to show you the user journey of a customer who's linking their bank account on Paystack Direct Debit for the first time below:

Keywords

If you would like to revoke a mandate tied to a merchant, please feel free to contact us via email at support@paystack.com or our contact form if you have any questions.