Canceling a SEPA direct debit mandate

Suppose your customer has decided to cancel his subscription. Or maybe the project you've been working on is finished. After receipt of the final payment, the next step is to cancel the direct debit.

This procedure must have happened like this. To cancel a direct debit, you usually only have to do the reverse of what you did when you entered it. Has your finance department or accountant arranged this? Then you simply let them know that a direct debit must be cancelled.

If the transaction was done by a payment company like Mollie, you can cancel the direct debit manually . Sometimes this is necessary, for example if changes in payment are required halfway through a project or service. But usually, a direct debit is canceled on its own when the contract or service agreement expires.

Can the customer cancel a direct debit?

Naturally. A direct debit can be canceled at any time by both the company and the customer.

A customer can do two things: he can let you know directly that he wants to revoke the direct debit mandate, or he can cancel it himself via his bank.

Banks in the SEPA zone (Europe)

The procedure for direct debits in the SEPA zone cancellation is largely the same as in the UK. The main difference is administrative responsibility. In the UK, your customer’s bank stores all of the direct debit information. In the SEPA zone, you are responsible for storing this information. Usually your payment company will arrange this for you, for example by keeping a list of canceled direct debits.

And if our contract hasn’t expired yet?

Customers are not obliged to pay by direct debit. If they cancel an existing direct debit and choose a new payment method, for example a credit card, their account will remain valid.

Sometimes customers try to cancel a direct debit if they want to get out of a contract or are dissatisfied with the service. This is not allowed. Canceling a direct debit is not the same as canceling a contract.

If a customer tries this, you may not continue to debit their account. However, you can try other legal means to recover the money they owe you.

How quickly is a direct debit canceled?

If the customer cancels the direct debit through his bank, it will be executed immediately as long as it is done within the bank’s opening hours.

If the customer has asked you to cancel the direct debit, you have three working days to do so. If you take longer, you can quickly face legal action from your customer.

This is an essential part of the entire collection system, to prevent companies from collecting unnecessary payments. Regulators in the UK and Europe have little understanding of attempts to circumvent customer orders.

If the customer cancels too close to the regular payment, it may happen that the final payment goes through unintentionally. In that case, you must return the payment immediately, even if the customer owes you money.

Can I restart direct debit if the customer changes his mind?

No not really. In some cases, the customer can instruct his bank to reverse the cancellation. If you have canceled the direct debit, you must obtain a new authorization from the customer to debit his account again.

Fortunately, this is relatively easy with an online payment company. You just start a new product, contract or service agreement, let the customer enter their details and then make the first payment. And you’re done.

Can I change the payment without canceling the direct debit?

Yes. Some companies use direct debits for installments or predictable monthly payments. Other parties, such as telephone companies, collect a varying amount equal to the invoice for that month.

With variable payments, a new authorization is not required, but it is better not to surprise your customer. Unexpected charges often lead to disputes, chargebacks, and cancellations. To prevent this, send an itemized invoice with an announcement of the direct debit two weeks before you collect the payment.

Développez votre entreprise avec Mollie

Mollie helps you easily start and cancel direct debits in the UK and Europe. We ensure compliance at check-out, storage of documents and reporting, so you can focus on what you do best.