How the SEPA Direct Debit works

Introduced on 1 August 2014, SEPA direct debits do not pass through the bank card networks but are made on a bank-to-bank basis, thus reducing transaction costs. It also simplifies procedures, since previously the customer had to provide a direct debit mandate to the supplier (water, electricity, internet, etc.) and to his bank respectively. The supplier used it to make the withdrawal and the bank checked that the mandate received from the supplier and the supplier’s mandate corresponded. Once the verification was done, the payment was made. With the SEPA Direct Debit, the customer only provides a RIB and a direct debit mandate to the supplier, who uses it to make the direct debit and manage the mandate.

The customer only contacts his bank in the event of fraud being detected, claiming reimbursement of the amount debited.

SEPA Creditor Identifier

Information on the SEPA Direct Debit

Each contract requires a different mandate and all direct debit mandates have a RUM (Unique Mandate Reference), a specific number assigned by the creditor who provides it to the debtor. The management of the mandate is the responsibility of the creditor, who stores it himself or entrusts it to a third party mandate manager, such as Treezor. Furthermore, within 30 days, the creditor must be able to return the mandate to the debtor if the latter requests it. The Creditor must have a SEPA Creditor Identifier (SCI), which replaces the national issuing number.

A SEPA Direct Debit Mandate must contain the following eight pieces of information:

  • Creditor’s identity
  • SEPA Creditor Identifier (ICS)
  • Unique Mandate Reference (RUM)
  • Identity of the debtor
  • Debtor account IBAN/BIC
  • Type of sampling: recurrent or one-off
  • Type of mandate: SDD Core or SDD B2B
  • Date of signature of the mandate
  • SEPA Direct Debit: reimbursement and mandate execution time

In the case of a single or first direct debit, the minimum deadline for submission/presentation of SEPA direct debits is set at 5 working days before the due date. In the case of a second direct debit, this period is reduced to 2 working days. The payment is collected within 3 working days.

The Debtor may request reimbursement of the SDD Core Direct Debit already made within 8 weeks, regardless of the reason, and within 13 months if the transaction is unauthorised (invalidity or lack of mandate).

Good to know: the period of validity of a mandate for which no order has been submitted is 36 months. Beyond that, the SDD Core Direct Debit lapses.

Differences between SDD Core and SDD B2B

The SEPA B2B Direct Debit is an optional payment scheme, used only to manage the collection of business-to-business payments. It does not apply to individuals or auto-entrepreneurs. In contrast to the SDD Core Direct Debit, which applies to all payers and is mandatory for banks in the SEPA zone.

The SDD B2B is quicker to process and collect and has very restrictive refund conditions. B2B Direct Debit is a so-called “authorised” payment, so it is impossible to request a refund, except in cases of fraudulent or erroneous direct debits.

Treezor offers all SEPA payment solutions directly via API and can handle, within the Euro zone, the entire collection process on behalf of a company.

Advantages of the SCT credit transfer

With the entry into force of the SEPA Credit Transfer, transaction costs have been reduced, cross-border trade has become simpler, accounting reconciliations have been facilitated and cash management has been optimised, thus facilitating business operations within the European area.

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