Direct Debit Overview

Mono Direct Debit (MDD)

Mono Direct Debit (MDD) empowers you to seamlessly collect variable payments from your customers, on an ongoing basis from all major Nigerian banks through a unified API integration.

With MDD, you can seamlessly collect multiple variable payments without the need for reauthorization. Users can establish payment limits within the long-lasting consent, specifying both the total amount and payment frequency.

Additionally, MDD also offers a "confirmation of funds" feature that enables you to check the customer account balance for the availability of funds before initiating a debit. This enhances payment success rates by ensuring funds are accessible before proceeding with the transaction.

Features

• Compatibility with Connect: Using an already linked account, a business can initiate a recurring payment, this will pass all the account details + user details and the user simply has to authorize the mandate.

• Future-dated payments: Future-dated payments are financial transactions scheduled to occur on a specific date in the future. These payments can be automated, such as bills or loan instalments, ensuring timely execution without manual intervention.

• Variable payments: Variable payments are payments that fluctuate in amount, often based on changing factors. They lack a fixed, predetermined value and can vary over time such as savings etc (Piggyvest use case)

• Subscription payments: Subscription payments involve regular, usually recurring, financial transactions made to access a service, product, or content. These payments are typically scheduled at set intervals, such as monthly or annually. Subscriptions are commonly used for services like streaming, software, magazines, or gym memberships.

• Money sweeping: Money sweeping facilitates seamless and efficient money movement between accounts. e.g. You can set a direct debit sweep to move money monthly from your GTbank to your Access bank.

Types of Debit

Variable Debit

A variable debit allows for flexible withdrawals of an unspecified amount from the customer's account at any time, with a predefined debit limit. An excellent use case would be food delivery service offering their users the option to establish a variable mandate, permitting them to use their bank account for food payments as needed, within a specified maximum amount, throughout the mandate's validity period. This means that if you authorise a mandate amount of ₦200,000 for 12 months you can can debit the account in varied amounts and times up to the total debit amount set.

Fixed Debit

A fixed debit involves regularly deducting a prearranged payment amount from the customer's account. This mandate type is particularly suited for lending companies seeking to collect funds from customers based on predefined loan agreements. For example, if you authorise a mandate amount of ₦10,000 to debited monthly for twelve months our systems will automatically total and calculate the total mandate amount as ₦120,000 for the specified account.

Types of Mandates

There are three categories of mandates:

Signature mandate

Overview

Using the signed mandate, the process begins by attaching the user's signature to the mandate creation, which is then electronically sent to the bank for confirmation. The bank verifies the signature, and they may reach out to the customer for further confirmation. Once approved by the bank, the mandate becomes instantly available for debiting and balance inquiries.

Process

1. Initiate the setup of a mandate by collecting your customer's information, such as their account number, bank details, BVN, and signature.
2. Programmatically, we automatically forward the mandate to the bank for their approval.
3. The bank conducts a verification of the provided signature and may initiate contact with the customer for additional confirmation if deemed necessary.
4. Once approved, the mandate becomes functional for conducting debits and checking account balances.

Electronic mandate

Overview

E-mandate provides a faster approval process. After creating the mandate and transferring NGN50 to the designated account, approval typically occurs within 1-3 minutes. However, please note that there is a 1 hour maximum waiting period before the mandate becomes fully functional for debiting and balance inquiries.

Process

• 1 Initiate the setup of a mandate by providing your customer's essential information, including their account number, bank details, and BVN.

• 2 Instruct the customer to promptly make an ₦50 transfer to the designated bank account returned from the create mandate response.

• i.) Ensure that the NGN50 transfer must originate from the same account where the mandate was initially created; otherwise, it will not be approved.

• 3 Expect the mandate's status to transition to "approved" within a timeframe of 1 minute.

• 4 Allow less than 1 hour, to become fully functional for both debiting (variable and fixed) and balance inquiries

Global Standing Mandate (GSM)

Overview

Global standing mandate (GSM) or Multiple Account Direct Debit enables payments to be deducted from any linked accounts with sufficient balance. If the primary mandated account lacks adequate funds, the system automatically attempts to collect the repayment from those linked accounts.

The setup of the direct debit is almost instant for personal accounts, allowing you to provide immediate loan disbursement. For company accounts, the process waits for bank approval after the mandate is signed.

Note: The cost to establish GSM is N500, with a debit fee of 1% per transaction, capped at N1,000. Ensure your wallet has sufficient funds to cover the setup fees.

Process

• Your customer selects their bank type then proceeds to provide their account number, after which they then choose their type of account, which determines the verification flow. For a company account, only signatures are used for authorization.

• The customer enters their Bank Verification Number (BVN) and date of birth. If these details are verified, the process moves to the next step.

• In this step, an OTP is sent to the customer's phone or email to confirm all bank accounts linked to their BVN. Mono then sets up a signed mandate using the customer signature from step 4 on all the accounts except the main one entered in step 1.

• The customer confirms the loan terms (e.g., amount, validity) and provides their signature to authorize the recovery of the loan from all their accounts if the main account is not funded.

• For customers using either personal and business accounts, note that they will be asked to send 50N to a NIBSS designated account to complete the mandate setup after which a success screen is displayed, and a webhook is sent to your webhook URL.

• The setup of the direct debit is instant for personal accounts, allowing immediate loan disbursement. For company accounts, the process waits for bank approval after the mandate is signed.

Choosing the Right Mandate Type

It's essential to consider your specific requirements when selecting a mandate type:

Signed mandate:

• Longer approval process. (1hr - 72hrs, depending on the bank)
• Works with Retail, Joint and Corporate bank accounts
• Instantly ready for debiting and balance inquiries after bank approval.

E-mandate:

• Faster approval process. (1-2 minutes)
• Works with Retail and Corporate bank accounts
• A 1 hour maximum waiting period after approval before debiting and balance inquiries is possible.

Global Standing Mandate (GSM):

• Works with Retail and Corporate bank accounts
• For the linked accounts to a created gsm mandate, approval can be within (1hr - 72hrs) depending on the bank.

Debit and Mandate Creation Limits

When interacting with our APIs to create mandates or initiate debit transactions, please be aware of the following limits:

• Minimum Amount: 200 Naira
• Maximum Amount: 200 million Naira

These limits ensure a secure and reliable processing of debit transactions and mandates through our platform. Make sure to adhere to these constraints when initiating mandates/transactions via the APIs.

Bank Coverage

Pricing

Note

Please ensure that your Mono wallet on the dashboard has sufficient funds to cover any applicable fees that will be debited. Additionally, transaction fees will be deducted prior to settlement.

Note

• Transaction fees are deducted from the transaction amount.

Settlement Options

You have two settlement methods to choose from:

1. Instant Settlement: Funds are transferred to your designated beneficiary account immediately after a successful debit.

2. Next-day Settlement: All successful debits are settled in your bank account on the following business day.

FAQs

Can I have multiple mandates on a single account?

Yes, you can set multiple mandates on a single account, but you need to wait for approval on one mandate before you set a new one. Also note that you can't set the same amount and type of mandate on an account i.e. if an e-mandate of ₦15,000 is set on an account, you can't create another e-mandate of ₦15,000 running on the same account.

How do we track the status of the Direct Debit?

We send webhooks as well as provide status endpoints for you to track the mandate and debit operations

How long does it take a mandate to be approved

This depends on the authorization method and varies from bank to bank:

1. For E-Mandates: 1 minutes
2. For Signed mandate: 1hr or 72 hours (depending on the bank).
3. For GSM, 1hr - 72hrs depending on the bank for each linked accounts to a mandate.

What's a waiting period?

Once the user has authorized the e-mandate and it has been approved by the bank, there is a waiting period (1hr or 8hrs, depending on the bank) associated with the approved mandate during which debiting or conducting balance inquiries on the customer's bank account is not permitted. However, for a signed mandate, there is no waiting period in place.

Is there a limit on the number of times the partner can debit the user account

No, the limit only applies to the maximum debit amount set during mandate creation

Can the user cancel the debit

Yes, our mandate action endpoint allows you to cancel, pause and reinstate a mandate

Is there a limit on the total amount that can be debited

A maximum amount of NGN 200M

Who does the 50NGN on mandate creation go to?

The payer transfers it to NIBSS as authorization. Partners are charged a separate 50NGN as a creation fee for successful mandates only.

Do I need to fund my Mono Dashboard wallet to use this service

Yes, you will need to fund your Dashboard Wallet to use this service but you can reach out to support@mono.co for an invoicing system where we issue you an invoice every month.