EPC | SEPA Direct Debit (SDD) - SEPA Direct Debit (SDD)

SEPA Direct Debit (SDD)

The SEPA Direct Debit Schemes create, for the first time, a payment instrument that can be used for both national and cross-border euro direct debits throughout the SEPA area.

In November 2009, the EPC successfully launched the SEPA Core Direct Debit Scheme and the SEPA Business to Business Direct Debit Scheme. As of this date, banks throughout SEPA are gradually starting to deliver SEPA Direct Debit services to their customers. All branches of banks in the euro area must be reachable for SEPA Core Direct Debit by 1 November 2010 as mandated by the EU Regulation on cross-border payments in the Community. On the launch date, 2607 banks representing about 70 per cent of SEPA payment volumes signed up to the new schemes; of those, 2366 banks offered both SDD Core and SDD B2B services.

The SDD Core Scheme in a Nutshell

The SEPA Core Direct Debit Scheme - like any other direct debit scheme - is based on the following concept: "I request money from someone else, with their pre-approval, and credit it to myself".

The SEPA Core Direct Debit Scheme applies to transactions in euro. The debtor and creditor must each hold an account with a credit institution located within SEPA. The payment service providers executing the direct debit transaction must be scheme participants; that is, both must have formally adhered to the SEPA Direct Debit Scheme. The Scheme may be used for single (one-off) or recurrent direct debit collections; the amounts are not limited.

The SEPA Business to Business Direct Debit Scheme

The SEPA Business to Business Direct Debit Scheme (B2B) serves as the basis for the development of specific direct debit products and services that allow business customers in the role of debtors (payers) to make payments by direct debit as part of their business transactions.

The most important differences between the SEPA Core Direct Debit Scheme and the SEPA Business to Business Direct Debit Scheme are:

In the B2B Scheme the debtor is not entitled to obtain a refund of an authorised transaction.
The B2B Scheme requires debtor banks to ensure that the collection is authorised by checking the collection against mandate information; debtor banks and debtors are required to agree on the verification to be performed for each direct debit.
A debtor bank cannot offer the B2B Scheme to a debtor who is a "consumer" under the law of the country where that debtor bank is providing the payment services.
Responding to the specific needs of the business community, the B2B Scheme offers a significantly shorter timeline for presenting direct debits and reduces the return period.

The Mandate

Follow the link to learn more about paper mandates and e-mandates.

The Rulebooks

The SEPA Direct Debit Scheme Rulebooks and the accompanying Implementation Guidelines are the definitive sources of information regarding the rules and obligations of the Schemes. In addition, a document titled "Shortcut to the SEPA Direct Debit Schemes" is available providing basic information on the characteristics and benefits of the SDD Schemes (see below).