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Identify and Resolve International Direct Debit Failures

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Last updated on Aug 26, 2026

When a bank debit fails, the return code helps you determine the next step: retry the payment, update account details, or collect a new authorization. Across BACS, EFT, and SEPA, these codes point to common issues like insufficient funds, closed accounts, or revoked mandates. Recognizing these patterns makes it easier to resolve failures quickly and keep payments moving.

How to identify the type of failure

Most bank debit failures fall into one of three categories:

Authorization Problem: The mandate has been revoked, cancelled, or is no longer valid.
- BACS Code 1 / SEPA MD06 / EFT 905
- Action required: collect a new mandate from your customer
Bank Account Issue: The account has been closed, changed, or the details are incorrect.
- BACS Code 4 or 5 / SEPA AC04 / EFT 902–904
- Action required: collect updated bank details from your customer
Temporary Financial Issue: Insufficient funds at the time of the debit attempt.
- SEPA AM04 / EFT 901
- Action required: retry the payment

BACS direct debit (UK)

BACS returns in the UK use a single-character code for each type of failure.

Code	Meaning	What To Do
0 – Refer to payer	Bank does not process debit	Contact your customer to confirm their account status
1 – DD Instruction Cancelled	Mandate cancelled by customer	Customer must create a new Direct Debit mandate
2 – Payer Deceased	Account holder deceased	Stop collections on this account
3 – Account Transferred	Customer moved banks	Obtain new bank details and a new mandate
4 – Account Closed	Account no longer exists	Request updated bank account details from your customer
5 – No Account	Account number invalid	Confirm banking information with your customer
6 – Refer to payer	Bank declined payment	Customer must contact their bank directly
B – Invalid account number	Incorrect format	Correct the bank account number on file
C – Account number missing	Required field missing	Recreate the Direct Debit instruction

EFT – Electronic Funds Transfer (Canada)

EFT returns in Canada are governed by Payments Canada rules.

Code	Meaning	What To Do
901 – Non-Sufficient Funds (NSF)	Insufficient balance	Retry the payment
902 – Account Closed	Account no longer active	Request new bank details from your customer
903 – No Account / Invalid Account	Account not found	Verify bank details with your customer
904 – Invalid Branch / Transit	Routing number issue	Correct the transit number on file
905 – Unauthorized Debit	Authorization disputed or revoked	Obtain a new PAD (Pre-Authorized Debit) agreement
907 – Stop Payment	Customer blocked payment	Contact your customer to resolve
908 – Payment Stopped by Payer	Customer intervened	Contact your customer to resolve

SEPA direct debit (EU)

SEPA uses standardized ISO return reason codes.

Code	Meaning	What To Do
AC01 – Incorrect IBAN	IBAN invalid or mistyped	Verify bank details with your customer
AC04 – Account Closed	Account no longer exists	Obtain a new IBAN from your customer
AM04 – Insufficient Funds	Temporary lack of funds	Retry the collection
MD06 – Mandate Cancelled	Customer revoked authorization	A new SEPA mandate is required
MS03 – Reason Not Specified	Bank declined without explanation	Contact your customer
RR03 – Mandate Invalid	Mandate data mismatch	Recreate the mandate
SL01 – Bank Restriction	Specific bank service restriction	Customer must contact their bank

What does "a new mandate is required" mean?

A mandate is your customer's formal authorization allowing you to debit their bank account. Depending on your region, this may be called a Direct Debit Instruction (UK), SEPA Mandate (EU), or PAD Agreement (Canada), but they all serve the same purpose: proof that your customer authorized the withdrawal.

A new mandate is required when the existing authorization is no longer recognized by the bank. This does not always mean your customer intentionally cancelled. Common reasons include:

Customer cancelled their Direct Debit
Customer changed bank accounts
Bank cancelled an inactive mandate
Mandate data mismatch between records
Customer disputed the authorization

In all of these cases, you need to collect authorization from your customer again. This typically involves your customer re-entering their bank details or completing a new authorization through your payment portal. Once complete, a new mandate reference is created and future debits can resume.

A cancelled mandate cannot be reused. A new authorization must be collected before attempting another debit.

For further assistance, contact Maxio Support at support@maxio.com.

If you're troubleshooting a US ACH return code instead of a BACS, EFT, or SEPA one, see Understand ACH Return Codes and Best Practices.

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