Direct debit is one of the most robust payment methods loved by lenders. However, it can be a little complex to set up. This document describes how a lender, or a biller could use the Lendsqr direct debit service to  accept loan repayments or scheduled payments.

Direct debit is good for invoice payments, loan repayments, and other recurring payments. 

How it works

One-time customer setup: Your customer enters their payment details securely online, authorizing you to collect payments with the Lendsqr direct debit. Soon, you will be able to send them a secure link.

Schedule payments: Schedule one-off or recurring payments using our dashboard, integrate with our APIs into your existing lending or invoicing software.

Get paid every time: Lendsqr’s direct debit payments are pulled automatically on due dates. Where you have specified partial payments for your loan repayments, we will collect as much as possible should the customers not have the complete amount in their accounts.


To use this service, the biller or lender must be a licensed lender or a service provider that provides services and expect payments on a scheduled basis. To have access to this service, the lender must also have signed a service agreement with Lendsqr for direct debit. 

If you want to use this service or know more about it, please email our Support Team at

Information required to be set up

After a contract is signed (or the lender is on the Lendsqr platform), there are a few information needed Lendsqr to help correctly set up:

  1. Support Email: This is the email that would be on the notification to customers providing authorization

  2. Support Phone: This is the phone that would be on the notification to customers providing authorization. It is usually part of the email that the customer would receive.

  3. Webhook URL: When the mandate status changes or transactions happen on the mandates, the Lendsqr system would send payload of the transaction or event to this URL. To know more about the webhook, please read our API documentation.

Authorization and payment flow

Direct debit is a peculiar payments method, and it follows some authorization flow that every lender and their customers must understand.

A lender or biller would present the customer with a document or form that shows the details of what they would be debited for. This document is called a mandate. The document must have the following details:

  • Biller name
  • Biller address
  • Customer name
  • Customer phone
  • Customer email
  • Customer account number
  • Customer bank
  • Schedule amount
  • Start date
  • Expiry date 
  • Description of payment 
  • Signature

This mandate can be manually or digitally created. For a manual document, a customer may print this out, sign, and scan back to the lender. A lender with sufficient technical capacity could digitally create this document and append the customer signature via an image upload or have the customer scribble this on a digital signature pad.

You can view and download a sample mandate here.

The mandate is then converted to base 64 and the other information is used to make an API call to Lendsqr. A lender can choose between PDF and PNG file formats. 

You can read more about the API documentation here.

Once the document is submitted, the system returns a mandate reference usually in the form xxx/yyyy. The mandate is immediately submitted to the customer’s bank. 

Each bank processes mandates in different ways but all of them have the same fundamental principles of KYC review of this mandate submitted. Banks will compare the data on the PDF document against the data that was part of the API payload. While some banks will use the signature comparison to approve the mandate, majority of banks will call the customers to reconfirm the mandates.

Common reasons why mandates are declined

  1. Customer account is dormant
  2. Customer cannot be reached by phone for confirmation
  3. Customer’s signature is irregular or wrong
  4. Information on the mandate document is different from what was submitted via APIs

Once the mandate is approved by the bank, the mandate then becomes available for debit. 

Additional notes

It is illegal and fraudulent to charge customers for transactions beyond what has been agreed on the mandate. The customer will have the full backing of the law to get a refund of the amount debit. 

Lenders who do such would also be immediately banned and blacklisted by Lendsqr.