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Taking payments from Europe with SEPA - an introduction

For UK-based companies, the prospect of getting set up to receive payments from clients across Europe may seem complex. Even for companies who are already doing so, chances are the method they’re using to receive payments from European clients is not as cost-effective, convenient or streamlined as it could be.

Perhaps you’ve already got a thriving business in the UK and want to branch out and start building up your sales and operations in new markets. But with a range of different payment habits, country-specific terminology and a choice of 24 different languages to operate in, the prospect of expanding your business across Europe may feel rather daunting.

Diverse payment preferences

Or maybe you’re already serving European clients, but the payment methods you use to receive funds are fragmented, cumbersome, expensive - or all of the above. Across Europe, there are a range of payment preferences that it’s important to keep in mind when preparing to enter new markets. For example, research has shown that credit cards are unpopular in some European countries, such as France. 39% of French respondents in a recent survey said they were ‘very uncomfortable’ using credit cards for subscription payments.

In Germany, credit card use is very low, and Germans use Direct Debit more often than any other EU country - twice as high as in the UK, according to the World Class Payments report from Payments UK. In addition, Direct Debit is the most commonly used payment method among German businesses.

Many payment methods come with disadvantages such as high transaction fees, various bank levies and poor user experience. Not only that, but customers in many European countries don’t consider credit cards a standard payment method, and companies should be aware of this when making European expansion plans.

Fortunately, there’s another way for UK businesses to take payments from European clients. Direct Debit, the UK’s favourite method for taking recurring payments, is also very popular across Europe.

Direct Debit makes sense in Europe

In recent research conducted in France, Germany and Spain, over one third of customers surveyed said they felt most comfortable paying for subscription services using Direct Debit (as opposed to cards or PayPal). With Direct Debit already well-established across much of Europe, it makes perfect sense to offer it as a payment option for your Europe-based customers.

Thanks to the introduction of the Single European Payments Area (SEPA), taking European payments via Direct Debit is a lot easier than you might have expected. SEPA aims to harmonise payments across Europe, making them as simple and cheap as domestic ones by creating a single market for euro-denominated payments.

One of our merchants, Sage, chose to use SEPA via GoCardless to help them consolidate payment collections into one place, while reducing operational overheads and administrative costs. Sage currently takes payments from customers in Spain, France, Germany, and Ireland. Using SEPA also allowed Sage to offer a wide range of choice for its customers. A representative of Sage said:

“It’s always important that we give our customers as much payment choice for our products as possible; this will always mean that we look to take the regional debit payment choice.”

The rise of SEPA

While Direct Debit has been used in Europe for many years, separate schemes existed within each country until SEPA became fully operational in August 2014. With SEPA, businesses can now take payments by Direct Debit from customers across Europe just as easily as the UK.

Direct Debit via SEPA is particularly useful for invoicing and regular subscriptions. It’s a popular choice for recurring payments as it’s low-cost, safe and convenient. And what’s more, customers in most European countries are usually highly familiar with Direct Debit payments.

To help you get started, here’s our guide to kicking off your European payments with Direct Debit, SEPA and GoCardless:

How do I get started with SEPA?

It’s really simple to start taking SEPA payments from your customers. Here are the steps to follow:

  • Contact our support team

  • Make sure you have a bank account that accepts payments in euros and also accepts SEPA Direct Credit payments (so we can pay out funds to you)

  • Add your euro bank account on your GoCardless dashboard

  • Make a verification payment of 1 euro cent

  • Select euros as the currency you want to use. Your payment pages will then offer customers the option to input an IBAN number to send payment

  • Start receiving payments from customers in euros

How long does it take to get setup to use SEPA?

Once you send support an email or create a ticket, we’ll go through the whole SEPA setup process for you, enabling it on your account.

You’ll also need to make the 1 cent euro verification payment and make sure you have a bank account that can accept euros. When that’s all done, everything is essentially the same as setting up your UK-based Direct Debit with GoCardless - quick and easy!

How much does it cost to take payments in Europe?

We offer three pricing plans: Standard, Plus, and Pro, with a range of features to suit customer needs. For full details on pricing, please see our pricing page, or contact our sales team to discuss further.

How long will it take me to get paid?

For merchants receiving euro payments via SEPA, funds will usually be received five working days from when the payment is created. To receive payments in euros using GoCardless, merchants must be located in one of the following countries: Austria, Belgium, Finland, France, Germany, Ireland, Luxembourg, the Netherlands, Spain, Sweden, or the UK. Merchants in any of those countries can use GoCardless to take payments in euros from customers anywhere in the SEPA zone, as long as those customers are located in countries that predominantly use the euro.

Which countries can I take payments from?

At present, GoCardless allows businesses based in Austria, Belgium, Finland, France, Germany, Ireland, Luxembourg, the Netherlands, Spain, Sweden and the UK to take euro payments from across the SEPA zone.

Do I need an agreement with a European bank to get paid?

No, all you need is a bank account that can accept euros. GoCardless handles all banking relationships on your behalf as part of our service, for no extra charge. We’ll also handle all the potentially complicated legislation and compliance procedures for you, making the process of setting up European payments super-smooth and convenient for all our merchants.

There’s no need to hesitate any longer about taking payments from European customers. GoCardless handles all the complexities for you, making your experience smooth, quick and convenient using the simple GoCardless dashboard or API setup that you’re already familiar with.

Start taking your business global today. Contact our support team.

Start taking your business global today

Contact our support team to set SEPA up on your account

Interested in automating the way you get paid? GoCardless can help

Contact sales