What is SEPA Direct Debit?

SEPA Direct Debit is a Europe-wide Direct Debit system that allows merchants to collect Euro-denominated payments from accounts in the 34 SEPA countries and associated territories.


SEPA Direct Debit has now been implemented in all eurozone countries and non-eurozone SEPA countries. In these countries all Euro-denominated payments must be collected via the SEPA payment scheme.

This guide summarises the main features of the SEPA Direct Debit schemes from a merchant’s perspective to help you understand what it means for your business.

Key features of SEPA Direct Debit

SEPA Direct Debit is broadly similar to UK Direct Debit

  1. SEPA Direct Debit is pull based. Once given a mandate by their customer it is the merchant who initiates payments.
  2. SEPA Direct Debit payments are bank-to-bank. There are no card networks involved in the SEPA Direct Debit scheme. All communications happen directly between the banks.

However, SEPA Direct Debit differs from UK Direct Debit in five key ways:

1. Currency

All SEPA Direct Debit transactions happen in Euros (even if the relevant accounts aren't in Euros). Any currency exchange required is up to the payer's and merchant's banks.

2. Chargebacks

Payers can get a refund from their bank for unauthorised SEPA payments for up to 13 months. Under the UK Direct Debit Guarantee, the indemnity claim period is unlimited.

3. Bank details

To collect SEPA payments, you need a customer's BIC and IBAN rather than their account number and sort code.

4. Customers

Businesses and consumers can be treated differently (see SEPA Direct Debit refers to two schemes below).

5. Implementation

Several implementation details of SEPA Direct Debit differ from its UK counterpart including:

SEPA Direct Debit refers to two schemes

SEPA Direct Debit refers to two schemes: SEPA Core Direct Debit and SEPA B2B Direct Debit. In short, the B2B scheme is only available if you are collecting Direct Debit payments from other businesses.

The Core scheme is mandatory for all SEPA banks offering Euro-denominated Direct Debits. However, the B2B scheme is an optional scheme, meaning that not all banks are able to offer it.

When deciding on which scheme to adopt, the following should be considered to select the scheme that best suits your needs:

  1. Customers – The SEPA B2B Direct Debit scheme can only be used for payers who are businesses - not private individuals or microenterprises. The Core scheme can be used with all payers.
  2. Indemnity claim protections - SEPA B2B Direct Debit customers are not entitled to refunds of authorised transactions. Refunds for unauthorised transactions are only possible if the payer proves that he did not agree to a B2B mandate (up to 13 months after the debit date).
  3. Timing - SEPA B2B Direct Debit offers a shorter timeline for payment submission (1 day before the collection) and a faster response time from the banks in case of technical failure or being unable to realise the collection (2 days after collection).

Throughout this guide references to SEPA Direct Debit are, unless explicitly stated, to both the Core and B2B schemes.

How will SEPA Direct Debit affect UK merchants?

The SEPA Direct Debit Scheme only affects Euro-denominated Direct Debit payments. Merchants collecting in GBP within the UK will therefore not be affected. However, UK businesses collecting Euro-denominated Direct Debit payments are required to migrate to the SEPA Direct Debit scheme.

The SEPA Payment scheme makes collecting Euro payments cheaper and easier. If you would like further information on SEPA payments and how to become compliant, you may find our guide to getting ready for SEPA helpful.

SEPA Direct Debit and GoCardless

GoCardless is an online Direct Debit specialist that manages the entire SEPA Direct Debit collection process on your behalf. Merchants can collect and manage their payments through our REST API, an online dashboard, or by connecting GoCardless to a partner integration.

For a full list of countries you can collect SEPA Direct Debit payments from using GoCardless, visit our support centre.

To find out more about collecting SEPA Direct Debit or to register your interest with GoCardless, check out our GoCardless Europe page.

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