How SEPA Direct Debit works
The Single Euro Payments Area (SEPA) initiative was introduced in 2009 by the European Union to standardize Europe’s payments infrastructure, and make cross-border payments in the Eurozone as simple and cheap as those made locally.
Under the SEPA initiative, the SEPA Direct Debit (SDD) payment scheme was created to govern organizations that collect funds in Euros, with different treatments depending on whether your company is business-facing or consumer-facing.
With SDD, your businesses can simplify processing one-off or recurring payments for customers based in Europe. Improve cost efficiency and enjoy easier access to the European market.
- Ease of business in the EU: The SDD makes collecting payments in Euros cheaper and easier.
- Seamless recurring payments: If your business collects regular fees, such as subscriptions, SDD helps ensure you get paid on time while decreasing payment friction by offering a convenient “set and forget” function for your customers.
- Reduced admin: SDD solves the problem of failed payments due to card expiry or cancellation, and reduces admin costs associated with maintaining and updating card details.
- Higher conversion rates: Once a shopper is onboarded, SDD takes 3 simple steps to complete a payment, making it a preferred way to pay in Europe and a good way to attract more customers.
1. Shopper selects SDD at your checkout
2. Shopper verifies name and IBAN, and authorizes mandate
3. Shopper gets notified when the payment is complete
What is the SEPA Direct Debit mandate?
A SEPA Direct Debit Mandate is, simply put, the authorization your customers give you to allow you to collect direct-debit payments from their Euro-denominated bank accounts.
Your customers must first complete and submit a SDD mandate to a bank. When that’s done, the mandate becomes active once the first payment is confirmed.
Payvision can help you work through setting up your business to start processing SDD payments now and in the future. Our simple API and onboarding journey ensures your business is fully connected and compliant with mandate requirements, so you can start getting paid faster.
Learn about our integration options, check out our SDD backend documentation, or simply reach out to our dedicated support team if you’ve got any questions.