Last week I again received a mandate request form via the (paper) mail. Quite a hassle to fill-in and return and companies start to realise this as well. The sentiment towards the e-Mandate is changing. In the past six months we have seen a change of interest in the NL banks’ e-Mandate solution from ‘distrust and suspicion’ towards ‘appetite and willingness to consider’, particularly with regards to the general (CORE) direct debit variant.
So what happened in this six month period of time that explains this shift of interest? Let me take you through 5 important developments of the past months:
- To start with, there is more clarity on the implementation schedule of Dutch consumer banks that plan to participate. As of September 2015 all relevant consumer banks will be able to process a CORE e-Mandate.
- Furthermore, as a consequence of better alignment between collecting companies and the banking sector we see the ‘ not invented here syndrome’ replaced by a more and more positive interest in the product.
- Thirdly, the introduction of two new roles removes the uncertainty regarding the value of propositions from other e-Mandate solution providers (e.g. Accept Email):
- There is room for a role as ‘ reseller ‘ of e-Mandate in the form of the MSP (‘ e-Mandate Service Provider ‘). Parties such as Accept Email can easily be linked to the Dutch e-Mandate solution without additional investment on the side of the collecting company.
- There is room for parties like’ Collecting PSPs ‘ (CPSP)) to collect e-Mandates for their own name and account, including contracts with creditor-banks.
- As a fourth development, we see that more and more corporates realise that the e-Mandate significantly optimizes the current mandate maintenance processes. For example a mortgage service provider sees in the e-Mandate a perfect opportunity to replace their current paper/telephone processes for the change of bank accounts (as part of the mandate information) by an electronic process.
- Last but not least, companies start to realise that the continued usage of the (‘not legally binding’) internet tick is not acceptable from a compliance and reputational risk perspective now that an efficient alternative, being the e-Mandate, becomes available. Often this non-acceptance can be linked to the specific sector that the company is operating within. Interestingly enough, we see already that accountants raise an ‘audit-point ‘ for the use of the internet tick. Obviously the liquidity related to these collections is only guaranteed after 13 months, creating an additional (liquidity) risk in the meantime. And not surprisingly creditor banks start to realise this as well (they run the risk).
But this is not all! This week the ECB provided more insight in the content of the new SDD Rulebooks. As hoped for, the new SDD rulebooks give more room for alternative e-Mandate methods. Any ‘legally binding method of signature’ is now allowed, not only a 4-corner solution involving both creditor and debtor bank.
With the increased appetite of corporates to implement the e-Mandate the question arises: when to start with it? The answer depends on the urgency. Our experience is that the entire process of impact analysis, requirements definition, design and vendor selection takes about 2 – 3 months.. After which the realization phase still needs to begin… For some companies this means that an immediate start will be necessary.