Collecting with NIBSS Direct Debit mandates
How NIBSS Direct Debit mandates let a Nigerian business collect recurring payments, and how to record each collection as a receipt in your books.
By Achekam · · 5 min read · For Running a business businesses in Nigeria
Chasing the same customers for the same monthly amount is tiring work. A school waiting on termly fees, a gym collecting memberships, an internet provider billing subscribers: each month somebody sends reminders, checks the bank, and calls the people who forgot. Direct debit promises to turn that around, so the business collects on an agreed date and the customer does nothing.
In Nigeria, the rail for this is NIBSS Direct Debit. This article explains how it works as NIBSS describes it, the choices a business makes when setting up mandates, what NIBSS says it costs, and how the money that arrives should be recorded so your receivables stay accurate.
The mandate is the contract
NIBSS says NIBSS Direct Debit (NDD) offers automated debit of bank accounts to fulfil the contract, called a mandate, between the customer and a subscriber or biller. The business is the biller; the customer signs the mandate allowing it to debit their account.
Mandates can be on paper or electronic. Whichever you use, treat the signed mandate as a contract document. Keep it with the customer's file, note the start date and the amount or limit it allows, and record any cancellation the customer sends. When a customer disputes a debit, the mandate is the first thing anyone will ask to see.
Fixed, variable and standing instructions
NIBSS describes three kinds of arrangement:
| Type | What NIBSS says it does | Suits |
|---|---|---|
| Fixed mandate | Fixed amounts and frequencies of debits | Memberships, subscriptions, school fees on a set plan |
| Variable mandate | Variable amounts and/or frequencies | Usage-based bills, instalments that change |
| Global Standing Instruction | Recovering defaulted funds from multiple bank accounts using the subscriber's BVN | Lenders recovering loans in default |
Most ordinary businesses will look at fixed or variable mandates. A Global Standing Instruction is a recovery tool for defaulted funds, and it is not a way to collect routine bills.
Several debits and partial debits
Customers do not always have the full amount in their account on the day. NIBSS says an institution can debit a customer several times under one mandate, within the stipulated amount, to recover the full mandated amount, and can configure partial debits when the full amount is unavailable.
That flexibility has a bookkeeping consequence. One monthly charge can arrive as two or three separate credits on your bank statement, on different days. Your records have to cope with a bill that is part-paid for a while, then fully paid, without anyone guessing.
What NIBSS says it costs
NIBSS says its cost for a successful NIBSS Direct Debit transaction is N30, and that the banks offering the service may mark up the fee. The page is undated, so treat that as the position at the time of writing and ask your bank or aggregator what you will actually be charged per debit, including any mark-up and any set-up costs they add.
Because a partial debit is a separate transaction, it is worth asking whether each partial debit attracts its own fee. For a low monthly amount, several partial attempts could cost more than you expect.
Choosing an aggregator
Most businesses reach NDD through a bank or an aggregator rather than directly. NIBSS lists NDD aggregators including Paystack, Mono (Orakam), Pethahiah, One Pipe, VFD, Providus Bank and Wema Bank. When comparing them, ask:
- whether they support electronic mandates your customers can sign without a branch visit;
- what they charge per successful debit, and for failed attempts;
- how and when collected money reaches your account, and whether fees are deducted first;
- what report they give you listing each customer's debit, so you can match it to your records.
That last question matters more than it looks. A settlement that lands as one lump sum is hard to allocate unless you also get a list of who paid what.
Achekam runs no debit orders
Be clear about one limit. Achekam never charges a business's customer automatically: there are no saved cards or debit orders, and credit-control reminder e-mails carry no pay link. The mandate, the debit and the collection all happen with your bank or aggregator. Achekam's job starts when the money has arrived.
Recording the collections
The work in Achekam is turning each credit into a receipt against the right invoice.
Bring in the bank statement. Achekam imports bank statements as PDF, CSV, Excel, OFX, QIF, MT940 or CAMT.053, and checks each import so that the opening balance plus the movements equals the closing balance. Where the workspace has an AI model configured, it can read scanned or unrecognised PDF statements, and every amount must appear on the page.
Record each collection as a receipt. A business records customer payments against one invoice or spread across a customer's invoices. A part payment leaves the invoice part-paid, which fits partial debits well: the first debit reduces the balance, the second clears it. Any extra is held on the customer's account. A receipt can be re-allocated if it went to the wrong invoice, and administrators can refund or reverse it.
The receipt is the step that counts. Seeing the credit on the statement tells you the money arrived; recording it against the invoice is what moves that invoice from open to part-paid or paid, so your list of who still owes you stays true.
A monthly collection routine, in words
- Issue the month's invoices before the debit date.
- After the collection run, get the aggregator's list of successful and partial debits.
- Import the bank statement covering the settlement.
- Record each customer's debit as a receipt against their invoice, leaving short ones part-paid.
- Record fees as bank charges.
- Follow up only the customers whose invoices are still open.
NIBSS explains mandates, mandate types and pricing on its NIBSS Direct Debit page. For businesses that collect without any debit order at all, collecting memberships without debit orders offers another route, and recording debit order batches as receipts deals with settlements that arrive as one sum. Pick the mandate type first; the rest of the set-up follows from it.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
