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The future of Direct Debit - e-invoicing with standing order

Direct debit has been a handy way of getting consumer payments collected in the past. Now – with the help of e-banking and e-invoicing it is time to ask how much more could be achieved with a proper – some might even say radical – consolidation.

Today’s practise means that each invoice sender needs to keep registers – who should have it on paper, who direct debit (with paper notice) and who e-invoice – and how these come and go as customers and with different preferences.  Cumbersome – especially for smaller organizations – and for banks having to pass the information on the invoice senders. And for invoice receivers who often have to learn different turn-on and turn-off practises.

Tomorrows model can be radically simpler and much more cost-efficient (consumers pay all the costs..):

1. The invoice sender sends the entire file to a service provider who validates and passes them on in e-form (after conversion if needed) to own customers and other fronting service providers (typically banks). Those not having ticked “want-e-invoice” in the e-bank (or other service) will get a printed invoice (and pay the cost of it).

2. On receipt of the e-invoice (or mobile notification)  the receiver can choose to (i) continue to confirm each payment separately, (ii) set invoices from specific sender as standing order or (iii) set invoices from specific senders as standing order when amount does not exceed self-selected amount.

Is it not self-evident that this SHIFT of the registration process into the netbank and KEEPING it there -  is saving huge costs at the sending end and finally unifying processes – irrespective of sending and receiving organizations? And of course making life much easier for consumers.

This will also speed up SEPA credit payments as the ISO20022 standard for e-Invoicing (carrying the ISO20022 payment reference) by default is leading to ISO20022 payments.

e-Mandate could then focus on creating a federated e-id service for the Single Market.


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Bo Harald

Bo Harald

Chairman/Founding member, board member

Transmeri, Demos, Real Time Economy Program,MyData

Member since

04 Nov 2008


Helsinki Region

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

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