SEPA Direct Debit: procedure, mandate, operation, cancellation

The SEPA Direct Debit allows individuals and businesses to automate their payments in euros, and offers greater ease in the management of recurring payments (subscriptions, invoices...). Set up at the request of the creditor, it requires the prior authorization of the account holder to debit by signing a SEPA mandate. So how does that work? What are the specificities of this payment method ? We take stock of SEPA Direct Debit and how to set it up to make the most of it.

SEPA Direct Debit in a nutshell

✔️ SEPA Direct Debit (SDD), or SEPA Direct Debit (SDD), is a Bank Direct Debit, made In euros, within the SEPA area.

✔️ Two forms are possible: the SDD Core for individuals and businesses, the Inter-company SDD, reserved for transactions between professionals.
✔️ Setting up the direct debit requires the authorization of the debtor, by the signature of a SEPA direct debit mandate.
✔️ The SEPA direct debit can be punctual, or programmed to be relapsing.

✔️ The revocation a SEPA direct debit is possible at any time.

❌ THEundoing of a SEPA direct debit executed is subject to conditions.

What is a SEPA Direct Debit?

The SEPA Direct Debit is a automated payment method, In euros, within the SEPA area. It is achieved At the initiative of the creditor (person who should receive the funds), not from the debtor (person withheld). SEPA Direct Debit allows the creditor to withdraw money directly from the debtor's bank account. For it to be implemented, however, the debtor must have given his authorization by signing a SEPA mandate. The withdrawal is then carried out by the debtor's bank and may be recurring or punctual (a single sample).

A mandatory procedure in the SEPA zone

Since 1 August 2014, SEPA Direct Debit has been mandatory for all banks offering direct debits in euros within the SEPA zone. The system thus replaces all previous “national” direct debit tools and is binding on all debtors and creditors in the SEPA zone (individuals, businesses, traders, traders, public administrations, etc.).

SEPA zone: the countries concerned

Acronym of Single Euro Payments Area, SEPA refers to the single euro payments area, currently composed of 36 countries and territories :

the 27 countries of the European Union;
member countries of the European Economic Area that are not members of the EU (Iceland, Liechtenstein, Norway);
the United Kingdom;
Switzerland;
Andorra;
Monaco;
San Marino;
the Vatican.

What are the 2 types of SEPA Direct Debit?

There are two forms of SEPA Direct Debit:

the SEPA Core Direct Debit, or SDD Core: accessible to everyone (individuals and professionals);
the SEPA B2B Direct Debit (Business to Business), or SDD B2B: reserved for inter-company transactions.

SEPA Core Direct Debit

Within the SEPA space, the SDD Core is obligatory for all economic actors using the euro. It concerns the individuals And the undertakings and is very often used to pay recurring bills (electricity, internet and telephone subscriptions...). With this type of direct debit, debtors benefit from increased protection: a unconditional right to reimbursement for 8 weeks on authorized withdrawals, and up to 13 months in the event of an unauthorized transaction.

SEPA inter-company direct debit (B2B)

Intended for bank withdrawals between companies, the B2B SDD is reserved for professionals regardless of their legal status (Association, company, sole proprietorship...). This type of direct debit was designed to facilitate commercial relationships and speed up transactions. It therefore proposes shorter deadlines for presenting it to the bank: 1 working day before the due date (compared to 2 to 5 working days for the SEPA Core debit). But on the other hand, consumer protection is also more restricted. Once the sample has been taken, there is no no possibility of reimbursement, except in the case of an unauthorised transaction.

Note: the inter-company SEPA direct debit is optional within the SEPA zone (unlike SDD Core, mandatory). It is therefore possible that some banks do not offer it.

	Prélèvement SEPA CORE	Prélèvement SEPA B2B
Utilisation en zone SEPA	Obligatoire	Facultative
Public cible	Particuliers et entreprises	Entreprises
Gestion du mandat de prélèvement	Le débiteur signe le mandat et l’envoie au créancier	Le débiteur signe le mandat et l’envoie : à sa banque ; au créancier.
Contrôle du mandat par la banque	Optionnel	Obligatoire
Délai de transmission du prélèvement	2 à 5 jours ouvrés avant la date d’échéance	1 jour ouvré avant la date d’échéance
Droits et délais de contestation	✔ Contestation d’un prélèvement autorisé : jusqu’à 8 semaines après exécution du SDD ✔ Contestation d’un prélèvement non autorisé : jusqu’à 13 mois après exécution du SDD	❌ Aucun droit de contestation après exécution d’un SDD autorisé ✔ Contestation d’un prélèvement non autorisé : jusqu’à 13 mois après exécution du SDD

How do I set up a SEPA direct debit?

To set up a SEPA direct debit, the debtor must give permission to the creditor to withdraw money from his bank account. This authorization is formalized in a SEPA direct debit mandate, which can be electronic or paper. In principle, it is the creditor who provides and pre-fills in the SEPA mandate form, because he must in particular indicate his SEPA creditor ID (ICS) and the unique mandate reference (RUM).

Here are the different steps for setting up a SEPA Direct Debit:

1 ️ Obtaining the ICS : If this is the first time this system has been implemented, the creditor does not yet have an ICS and must contact his bank to obtain one.

2 ️ Preparation of the mandate : The creditor pre-fills the mandate (identity, contact details, ICS, RUM...), then the address to the debtor.

3 ️. Signature of the mandate : The debtor completes the parts that concern him (identity, contact details, IBAN...) and signs the mandate.
4 ️. Sending the mandate : If it is a SEPA Core direct debit, the debtor sends the direct debit mandate only to the creditor. If it is a SEPA BtoB direct debit, the debtor sends the mandate to his bank and to the creditor.
5 ️. Transfer to the bank : The creditor issues the withdrawal order to his bank, which forwards it to the debtor's bank for execution.

6 ️. Sampling notification : At least 14 days before the withdrawal date, the creditor informs the debtor of the date and amount of the withdrawal.

What is a SEPA direct debit mandate?

The SEPA direct debit mandate is the document by which the debtor (debited person) gives a sampling authorization to a creditor (person receiving the funds) to debit their bank account directly. The SEPA mandate may provide that the direct debit will be one-time (a single debit) or recurring, i.e. several automatic withdrawals at a fixed frequency (weekly, monthly, annual, etc.).

Once completed and signed, this mandate is sent to the debtor's bank, which is then responsible for carrying out the operation.

What should a SEPA direct debit mandate contain?

To be compliant, the SEPA direct debit mandate must at least contain the following information:

the nature of the mandate: SEPA core or SEPA B2B;
the type of sample (one-off or recurring);
the unique mandate reference (RUM), which must be given by the creditor;
the identity and contact details of the debtor (Name or company name, address or registered office, etc.);
the identity and contact details of the creditor receiving the direct debit (Name or company name, address or head office, etc.);
the SEPA creditor identifier (ICS): a unique number assigned to the creditor;
the bank details of the debtor's account (IBAN) and BIC code);
the signature of the debtor, as well as the date and place of signature.

Where can I find a SEPA direct debit mandate?

Generally, it is the creditor who provides the SEPA mandate form, as he must mention the RUM and ICS, which are his own references. But if this is not the case, blank copies are available. online to download. However, it is necessary to check that all the mandatory data is included.

How long is a SEPA mandate valid for?

The validity period of the SEPA mandate depends on the nature of the direct debit. If it is a one-time debit, the authorization only applies to this payment. Once executed, the SEPA mandate is no longer valid.

In the case of a recurring direct debit, the mandate does not have no expiration date. It will be valid until the debtor decides to put an end to it, by requesting revocation from the creditor.

However, if no direct debit is made for a period of 36 months (from the due date of the last payment), the SEPA mandate lapses and can no longer be used. If necessary, a new direct debit mandate must be signed by the debtor.

How do I stop a SEPA direct debit?

The debtor can choose to end a SEPA direct debit at any time. To do this, he must simply send a Request for revocation to the creditor no later than the day preceding the due date. It is advisable to do this by registered letter with acknowledgement of receipt, specifying the reference number of the mandate to be arrested. As a precaution, the revocation must also be sent to the bank so that it no longer executes the debit orders of this creditor. Revocation fees may then be charged depending on the banks concerned.

How do I know the origin of a SEPA direct debit?

In principle, each SEPA direct debit mentions elements that make it possible to identify it: name of the creditor, ICS, amount debited... If the wording of the transaction is not clear enough, the best solution is to search for more information via a search engine by typing what is entered on the bank account. Most of the time, this will make it possible to identify the company linked to the levy. Here are some common examples of SEPA Direct Debit labels:

Intitulé du prélèvement	Opération financière rattachée
Prélèvement spb	Contrat d’assurance auprès de SPB
Prélèvement asp	Abonnement auprès de April Santé Prévoyance ou Agence de Service et de Paiement (organisme de paiement dédié à la mise en place de politiques publiques.)
Prélèvement ca consumer finance	Crédit à la consommation auprès du Crédit Agricole
Prélèvement eps	Service de protection par télésurveillance auprès de Euro Protection Surveillance
Prélèvement predica	Contrat de prévoyance ou d’assurance-vie auprès de Prédica
Prélèvement adis	Contrat de prévoyance ou d’assurance-vie auprès d’Adis
Prélèvement nie	Contrat d’épargne salariale et retraite auprès de Natixis Interepargne
Prélèvement kereis	Contrat d'assurance auprès de Kereis France
Prélèvement ceo	Abonnement pour l’eau auprès de la Compagnie des Eaux et Ozone (Veolia)
Prélèvement lcl solution	Contrat d’assurance auprès de LCL
Prélèvement info presse	Abonnement auprès d’Info presse
Prélèvement homeserve	Contrat d’assistance auprès d’Homeserve

Otherwise, it is always possible to contact your bank to ask for more details on the unknown payment and possibly take action in the event of a fraudulent debit.

How do I cancel a SEPA direct debit?

It is possible to dispute a SEPA direct debit, under certain conditions, and to obtain a refund. You must send the request to your bank specifying the RUM, the ICS, the amount and the date of the debit.

Contesting an authorized SEPA direct debit

In the case of an authorized SEPA direct debit, therefore in the presence of a signed mandate, the debtor can request the cancellation of a SEPA Core Direct Debit In a 8 weeks delay (from the debit date). The bank has 10 days to make the refund.

On the other hand, it is impossible to cancel an authorized SEPA B2B direct debit that has already been executed.

Contesting an unauthorised SEPA direct debit

In the presence of an unauthorized SEPA direct debit, i.e. for which no mandate has been signed, the debtor has 13 months (from the date of payment) to send the dispute to his bank and provide the supporting documents supporting his request for reimbursement.

Online payment with SEPA direct debit

Some sites offer to make your payments with SEPA direct debit. Often used by SAAS (Software As A Service) platforms, these companies charge you at the end of the month for the amount you have consumed. There are two benefits:

You do not need a bank card to make this type of payment.
You don't need to initiate the payment yourself every month

Several payment intermediaries such as Stripe offer Sepa Direct Debit as a payment method. Setting up is very easy both for the platform and for you. All you have to do is fill in your IBAN and validate the operation. Here is an example of the Un Grand Jour payment page when we offer our customers to pay by direct debit.

The mandate is accepted when you click on the “Donate €100” button. The payment platform indicates the terms of the mandate:

By clicking on Donate €100.00, you authorize (A) Un Grand Jour and Stripe, our payment service provider, to instruct your bank to debit your account, and (B) your bank to debit your account, in accordance with these instructions. You are entitled to obtain a refund from your bank, in accordance with the terms of your contract with the bank. Any refund request must be submitted within 8 weeks of the date your account was debited. Your rights are specified in a statement that you can obtain from your bank. You agree to receive notifications about future debits up to 2 days before they occur.

What are the risks for platforms and e-commerce

If you are a SaaS platform or an e-commerce site, there is a significant risk of payment disputes and fraud. Unlike disputes involving a bank card, the SEPA mandate does not provide any guarantee against disputes, customers have 8 weeks to request a refund of the payment and you do not have the option to appeal.

Our experience with SEPA direct debits: We set up SEPA direct debit with Stripe so that participants in the Un Grand Jour online jackpots could use this very practical payment method (the customer just needs to enter their Iban and the payment is complete). Unfortunately, the customer can enter an Iban that he does not own, there is no system equivalent to 3D secure to validate the ownership of the iban. Having tested it ourselves, using IBANs from team members, it is very easy to defraud. Foreign systems such as Bancontact or Giropay are a good alternative to SePa direct debits because they guarantee account ownership through a complex verification flow, which provides a guarantee against disputes. Since these tests and the fraud attempts by our customers, Un Grand Jour has removed the SEPA direct debit payment option.

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