Direct debit is the automatic collection of one-time or recurring payments. It runs via SEPA Direct Debit, the European payment method for collecting funds from a bank account. It requires prior permission — also known as a mandate. To set up direct debit, you need a contract with a bank or a payment service provider like Buckaroo.

One major reason to choose a Payment Service Provider (PSP) is the ability to view all transactions — from iDEAL and PayPal to direct debit — in a single dashboard. Buckaroo also offers advanced credit management features. Set collection schedules, pause payments, segment customer groups, and define follow-ups for failed debits. Buckaroo stores all digital mandates securely. If a debit fails, you’ll immediately see the reason in our system: unknown account number, insufficient funds, invalid mandate, etc. These failed attempts can then be followed up automatically via Credit Management.

This type is commonly used by charities for one-time donations. You’ll need the account number, account holder’s name, and amount. The debit is flagged as a "one-off SEPA Direct Debit."

Recurring debits apply to memberships, subscriptions, insurance, etc. These payments occur monthly, quarterly, or annually and don’t have to be the same amount each time.

Mandates no longer require a paper form. A merchant can send a digital mandate via email or integrate it into the website. Customers approve the mandate directly in their online banking. This is called an e-Mandate — a digital authorization for direct debit.

A mandate provides more security: once a customer approves it, they can’t just reverse the debit. Some businesses skip this step to reduce friction, but that increases the risk of chargebacks. Note: A €0.01 iDEAL transaction is not a valid mandate.

Disagree with the debit? You can reverse it within 8 weeks — no questions asked. However, the payment obligation still applies and another method may be used.

If a debit fails, the bank sends back a reason code. These R-transactions can be viewed in Buckaroo Plaza. Most failed debits fall into one of these 7 categories:

When a debit fails, a reason code is sent — for example, MS03 (administrative error). Causes include invalid account numbers or names. In that case, a second attempt is not useful; send a payment request instead (e.g. via iDEAL link). Buckaroo automates this logic. If the reason is insufficient funds (AM04), a second attempt is logical. Invalid IBAN? Send an alternative payment request via email, SMS or letter. All follow-ups are fully configurable by customer group or situation.

If the customer’s bank changes but a mandate is active, it can be transferred using the mandate reference. However, a new approval is required through the new bank's online environment. The easiest way is to offer an update option in a secure login area (MyAccount).

Visit our product page and request a free test account.