What Is a Direct Debit Mandate?

The payment power of attorney is also called "entrusted payment settlement". A settlement method in which a payment unit entrusts its account-opening bank to transfer money from its depositor to the receiving unit. It is applicable to the settlement of commodity transactions, labor service supply, fund transfers and other payments between units in the same city. The payment unit shall fill in a "payment entrustment form", and notify the bank that opened the account. After the bank has reviewed the funds, it will transfer the money to the bank that opens the receiving unit and deposit it in the receiving unit. A power of attorney can only be transferred, cash cannot be withdrawn, and it cannot be directly given to the receiving unit to collect money from the bank. If the voucher of the power of attorney is imported from the account bank of the receiving unit, the principle of "receipt of credit" must be implemented. In urban areas where bills are exchanged, the deposit account of the receiving unit can only be entered after the prescribed exchange time. ^[1]

Power of Attorney

The power of attorney is applicable to the settlement of commodity transactions, labor service supply, fund allocation, and other payments between units in the same city.

The power of attorney can only be transferred, not cash. The starting point of the amount and the validity period of the voucher shall be prescribed by the local banks.

China has abolished this settlement method since April 1, 1989.