Direct Debit Overview
Offer customers a better way to pay. Direct Debit uses pre-authorized bank payments for subscriptions and one-time purchases, cutting processing costs and increasing success rates over credit cards.
Direct Debit enables merchants to collect payments directly from customer bank accounts through pre-authorized mandates. Customers provide a one-time authorization, allowing you to pull funds from their accounts for recurring payments, subscriptions, or one-time purchases. Direct Debit operates through local banking networks and schemes like Debin in Argentina and Wallet Fri in Guatemala, providing higher conversion rates, lower fees than cards, and predictable cash flow for recurring revenue models.
Supported Countries & Coverage
Direct Debit processing is available in the following countries:
| Country | Direct Debit Schemes |
|---|---|
| Argentina | Debin |
| Guatemala | Wallet Fri |
Use Cases
Subscription & Recurring Billing
Automate recurring payments for subscriptions, memberships, and SaaS platforms with predictable timing and reduced payment failures compared to card-based billing.
Invoice & B2B Payments
Streamline business-to-business payments and invoice collections with direct bank account access, ideal for high-value transactions and regular supplier payments.
Utility & Regular Payments
Perfect for utility companies, insurance providers, and any business collecting regular fixed-amount payments from customers with minimal friction.
Marketplace Payouts & Collections
Marketplaces can collect funds from buyers and distribute to sellers using the same Direct Debit infrastructure, simplifying reconciliation and reducing payment processing costs.
How It Works
The Direct Debit process involves customer authorization followed by payment collections:
- Customer Authorization: Customer provides bank account details and authorization for direct debit payments through your application.
- Payment Request: Your application sends a payment request to Localpayment's API with customer bank information and payment details.
- Payment Processing: Localpayment routes the transaction through the appropriate local banking network and initiates the fund transfer.
- Payment Confirmation: Your application receives real-time updates on the payment status via webhooks, allowing you to take any necessary subsequent actions promptly.
- Customer Notification: Your application notifies your customer of the payment result and provides relevant transaction details.
Prerequisites
Before offering Direct Debit to your customers, ensure you've completed these essential requirements:
Implementation Guide
Implementing Direct Debit enables payment collections with higher reliability and lower costs. Below are the specific implementation guides for each supported scheme:
Debin (Argentina)
Argentina's real-time direct debit system enabling instant payment requests between bank accounts. Process one-time or recurring payments with immediate customer authorization through their online banking platform.
Wallet Fri (Guatemala)
Guatemala's Wallet Fri system for direct bank account debits through authorized mandates. Collect payments from customer bank accounts with pre-approved authorization for recurring billing scenarios.
Direct Debit Operations
Once Direct Debit is configured, you can manage various operational aspects throughout the payment lifecycle. The available features depend on the specific scheme and country regulations:
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