The word ‘mandate’ comes from the Latin root words ‘manus dare’, which directly translates to ‘hand give.’ The modern-day definition of a mandate is ‘an official order or commission to do something.’ In the banking space, this applies to accounts; by specifying who can use it, access the funds, and how.
Traditionally, these are contractual conditions settled in person at the bank and entail numerous rules and requirements. A bank account has one or more account holders. Mandates are very straightforward if only one person is operating the account and typically only involves direct debit mandates; an instruction from the customer to the bank to authorise a vendor to deduct money for scheduled debit payments for ongoing services. However, it becomes more complicated when there are authorised signatories or agents holding power of attorney involved.
Individual authorised signatories can use an account separately if the mandate specifies ‘any’ or ‘either’ authorised signatory can sign. A mandate that requires ‘joint’, ‘both’, ‘all’, or ‘any two’ authorised signatories to sign or access the account together means one authorised signatory alone cannot use the account - other authorised signatories must also approve the transactions. A bank cannot allow transactions or other activity without the consent of the other account holders.
These rules are determined by the account holders themselves and are often used for business accounts of corporate customers where mandates are granted in accordance with their roles and responsibilities. Different constraints can apply, such as amount limits, limits on the period, or a combination of both. There are also payment signing rules, where the payment is the determining factor: e.g., a payment above a certain amount is to be signed by two of the account holders, etc.
The combination of such signing mandates and payment signing rules can be very complex to manage, and in some cases, they are still paper-based and manually driven processes.
Typical problems caused by poor mandate management include:
By introducing a quality mandate management solution, you will:
As part of our Payments Hub, we can provide mandate management to central banks, retail banks, corporates, and service providers.
Sybrin developed a central mandate solution used by central banks in Africa - similar to the DebiCheck solution currently used in South Africa. This solution would typically be deployed with the central clearing house and provide the following functionalities:
Master record of mandate information
As captured by participating banks, mandate information is recorded with an image of the signed paper mandate form in a document management system. This central mandate solution is the single source of truth for all participating banks.
Validation of the mandate information
Some information is auto validated, while manual review screens are available for a person to view the image of the signed mandate form and validate the captured data.
Master record of mandate information
Provide a local master record of mandate information if no centralised solution is available.
Amend existing mandate
Manage the mandate amendment process according to business rules of the bank or centralised solution.
New mandates and amendments of existing mandates to be approved:
Back-office approval by bank staff:
In some business processes, a manual approval form is required (maker checker) to approve new or amended mandates. The Sybrin solution includes customisable UI screens for approval purposes.
Manage debit order payment process
Sybrin’s solution includes various payment processes, like SWIFT, EFT, instant payments, single or bulk EFT debit orders, etc. In the case of EFT debit orders, payments are validated against either the central (or local) mandate information for the customer, and the transaction will be blocked or allowed. In the case of South Africa, the debit order process supports AEDO/NAEDO and DebiCheck.
The Sybrin solution can integrate into multiple mandate solutions to provide a single source of truth. An example is where AEDO/NAEDO mandates are supported in one system, while DebiCheck mandates are supported via a different process. In such a case, the Sybrin solution can provide a single view of both sources.
Bulk mandate functionality
Bulk mandate functionality is supported, either via file or API.
The Sybrin low-code platform allows traditional programmers, citizen developers and business analysts to customise all aspects of the mandate solution, including:
Sybrin has a payments solution for corporate-to-bank and service-provider-to-bank that include features such as:
This includes a mandate module with features such as:
Dashboards and reporting
Real-time dashboards, reports, and operational tools such as liquidity and transaction monitoring.
For more information about our Payments Hub solution, visit apex.sybrin.com/payments-hub
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