This module will not be further enhanced. Support is limited to defect fixing only.

Introduction to Direct Debit Mandates and Processing (FT only)

The Direct Debit Mandates and Processing (FT only) functionality describes the direct debit mandate handling in all forms, manually through paper, through clearing interface (HKICL) or internal system (merchants of banks like insurance, utility payments, etc).

Direct Debit Mandates

In Hong Kong, the banks provide different types of direct debits. A direct debit is an authorization given to the creditor to collect varying amounts from the debtor’s account. For the direct debit to be set up, mandate has to be created and submitted to the firm (creditor) to whom the customer (debtor) owes. The firm (creditor) then checks the mandate and returns the mandate to customer’s bank.

Mandate is an instrument which contains details of the customer, the payment details and the customer’s bank account details. This instruction provides the authority to the firm (creditor) to collect the amount due from the customer’s account on the due date. The current mandate provided by the banks in Hong Kong, have different forms of input and output channel.

Users can create mandates manually and further through request from channels including HKICL. When mandate request is received, the details are verified and further based on successful validation, mandates are created. The direction of a mandate could be inward or outward and accordingly accounts are either debited or credited when claims are received for processing.

Bulk Processing

Banks receive payment requests from customers, which can also be bulk payments. Bulk processing is classified as collections or auto debits or payments or auto credit. These transactions go through certain validation based on which the transactions are either accepted or rejected.

Inward direct credits are transactions, wherein a bank’s customer account is credited based on an incoming file. These transactions also go through certain validation checks based on which the transactions are either accepted, rejected or tagged as HOLD items.

The HOLD transactions are available for user action on a later date and will be either accepted or rejected.