Direct Debit

Once the policyholder agreed to pay the premiums by direct debit, the insurer initiates a direct debit activation procedure in order to notify the payer's bank about the payment arrangement. After the mandate is activated by the bank, the insurer must regularly send the necessary direct debit payment instructions files, in order for the bank to respond by transferring the agreed premium amounts into insurer's accounts.

The Billing and Collection solution helps SEPA* and UK insurers to handle direct debit payment operations - starting with the direct debit mandate activation procedure (in order to notify the bank about the payment arrangement between insurer and insured) up to the moment the payment is collected.

For example, for direct debit payments that respect some rules (such as providing the correct payment details, having an active mandate, and a bank account available for charging), the process of direct debit collection is completely automated, and the insurer does not need to intervene at all. Also, when the system receives a notification about the cancellation of a mandate, it changes the status of the specified mandate from Active to Cancelled, and logs this change into the mandate history. Second to that, some functionalities allow manual interaction - descriptions provided in the pages related to this topic.

The Billing and Collection direct debit functionalities can be applied to policies that have the payment type set to Direct Debit, and their business status is in InForce or Suspended. For those policies, the solution is going to process all the invoices that are in Generated business status - with their due date less or equal to the current date, added to the value set in the numberOfDaysInAdvance parameter. Consequently, for every valid policy with direct debit payment that has an invoice generated according to its payment schedule, the solution generates a payment instructions file that informs the bank to operate the direct debit payment (charge the premium amount on behalf of the insurer).

In order to accommodate the differences regarding the direct debit payments, the solution has dedicated workflows for the SEPA and for the UK financial area. Each flow has different menu items that display their respective functionalities and help you to handle direct debit payments processing according to SEPA or UK regulations.

*Single Euro Payments Area (SEPA) allows customers to make cashless euro payments – via credit transfer and direct debit, to anywhere in the European Union.

The solution does not allow for any direct debit mandate to be manually deleted.

Related To This Topic:

Direct Debit Business Workflow

FTOS_PYMT_DirectDebitMandate is the master business workflow that handles the different types of changes affecting a direct debit mandate during its lifetime - like transitioning the mandate through different versions and business states (from Draft to Expired). All the updates are logged in the mandate history tab, for further analytical use.

Below, an example of the FTOS_PYMT_DirectDebitMandate business workflow - as it is displayed on Innovation Studio:


For more details, consult also the Flow Parameters And Scheduled Jobs page.