SEPA Direct Debit

The SEPA Direct Debit is a Europe-wide direct debit system that allows merchants and businesses to collect euro currency payments from bank accounts in 34 SEPA countries on a one-off or recurrent basis. In non-eurozone countries like the UK, the SEPA direct debit scheme operates alongside the national direct debit scheme (till 31 October 2016).

A SEPA Direct Debit is a bank-transfer initiated by the merchant or business and (logically) is only allowed for with permission of the consumer (B2c) or business (B2B). These permissions are so-called 'mandates'. SEPA Direct Debits can be divided in SEPA Core Direct Debit and SEPA B2B Direct Debit. The difference between the two has to do with 'chargeback protection'.

While SEPA Core Direct Debits can be a cost-effective way of initiating payments throughout the euro-zone, it is good to know for merchants that these core direct debits can be charged backed for up to a period of 13 months.